Furniture Depot orders a certain brand of mattress from itssupplier and sells the mattresses at its retail location. The storecurrently orders 40 mattresses whenever the inventory level dropsto 20. The cost to hold 1 mattress in inventory for one day is$0.75. The cost cost to place an order with the supplier is $80,and inventory is 30 mattresses. The daily demand probabilities areshown in the following table:
Daily Demand Probability
2 0.08
3 0.14
4 0.20
5 0.26
6 0.22
7 0.10
Lead time is decrete uniformly distributed between two and fivedays (both inclusive). Simulate this inventory policy for a quarter(90 days) and calculate the total quarterly cost. Also calculatethe percentage of stockouts for the quarter. Replicate thesecalculations N times each to calculate the average values for thesemeasures.
