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Hot Water Number of Heater Sales Weeks This Per Week Number Was Sold

Higgins Plumbing collected sales data over 100 weeks and found that weekly heater sales followed a particular distribution. The document describes simulating heater sales over 20 weeks with a supply of 8 heaters. It found that there would be 5 stockouts. Repeating the simulation yielded similar results due to the random number generator. The expected weekly sales is now calculated to be 7.16 heaters based on the original sales distribution.

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tuan
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643 views2 pages

Hot Water Number of Heater Sales Weeks This Per Week Number Was Sold

Higgins Plumbing collected sales data over 100 weeks and found that weekly heater sales followed a particular distribution. The document describes simulating heater sales over 20 weeks with a supply of 8 heaters. It found that there would be 5 stockouts. Repeating the simulation yielded similar results due to the random number generator. The expected weekly sales is now calculated to be 7.16 heaters based on the original sales distribution.

Uploaded by

tuan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Refer to the data in Solved Problem 13-1, which deals with Higgins Plumbing and

Heating. Higgins has now collected 100 weeks of data and finds the following
distribution for sales:
Hot Water Number of
Heater Sales Weeks This
Per Week Number Was Sold
3 ………………………………. 2
4 ………………………………. 9
5 ………………………………. 10
6 ………………………………. 15
7 ………………………………. 25
8 ………………………………. 12
9 ………………………………. 12
10 ……………………………… 10
11 ……………………………… 5
(a) Resimulate the number of stockouts incurred over a 20-week period (assuming
Higgins maintains a constant supply of 8 heaters).
(b) Conduct this 20-week simulation two more times and compare your answers with
those in part (a). Did they change significantly? Why or why not?
(c) What is the new expected number of sales per week?

SOLUTION

Higgins plumbing:

Random
Number
Heater Sales Probability Intervals
3 0.02 01–02
4 0.09 03–11
5 0.10 12–21
6 0.15 22–36
7 0.25 37–61
8 0.12 62–73
9 0.12 74–85
10 0.10 86–95
11 0.05 96–00
1.00

a.

Random Simulated
Week Number Sales
1 10 4
2 24 6
3 03 4
4 32 6
5 23 6
6 59 7
7 95 10
8 34 6
9 34 6
10 51 7
11 08 4
12 48 7
13 66 8
14 97 11
15 03 4
16 96 11
17 46 7
18 74 9
19 77 9
20 44     7
139

With a supply of 8 heaters, Higgins will stock out 5 times during the 20-week
period (in weeks 7, 14, 16, 18, and 19).

b.   Average sales by simulation = total sales/20 weeks = 139/20 = 6.95. Other
simulations by students will yield slightly different results.

c.   Using expected values, E(sales) = (0.02)(3) + (0.09)(4) + (0.10)(5) + (0.15)(6) +


(0.25)(7) + (0.12)(8) + (0.12)(9) + (0.10)(10) + (0.05)(11) = 7.16 heaters. In a
longer time simulation, these two approaches will lead to even closer values.

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