Develop a Monte Carlo simulation model for the pharmacy situation described in P

Question

Develop a Monte Carlo simulation model for the pharmacy situation described in Problem 9 of Chapter 8. Use the IntUniform distribution in Risk Solver Platfomm tomodel the demand and find the distribution of profit for an order quantity of 15. Usemultiple parameterized simulation to identify the best order quantity to maximize profit. A local pharmacy orders 15 copies of a monthly magazine. Depending on the cover story, demand for the magazine varies. The pharmacy purchases the magazines for $2.25 and sells them for S5.00. Any magazines left over at the end of the month are donated to hospitals and other health care facilities. Modify the newswendar example spreadsheet to model this situation. Investigate the financial implications of this policy if the demand is expected to vary between 5 and 15 copies each month.

Explanation / Answer

Fixed cost of ordering 15 copies = 15*2.25=33.75

Revenue if demand is x copies is 5x

Profit/Loss = 5x-33.75

Distribution of profit is as follows

x Revenue Profit 5 25 -8.75 6 30 -3.75 7 35 1.25 8 40 6.25 9 45 11.25 10 50 16.25 11 55 21.25 12 60 26.25 13 65 31.25 14 70 36.25 15 75 41.25

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.