Free

60.1K

Verified Solution

Link Copied!

I have solved most of question and the answers I have sofar are correct, I just need help finding out the lower bound andupper bound

(All answers were generated using 1,000 trials and native Excelfunctionality.)

Galaxy Co. distributes wireless routers to Internet serviceproviders. Galaxy procures each router for $75 from its supplierand sells each router for $125. Monthly demand for the router is anormal random variable with a mean of 100 units and a standarddeviation of 20 units. At the beginning of each month, Galaxyorders enough routers from its supplier to bring the inventorylevel up to 100 routers. If the monthly demand is less than 100,Galaxy pays $15 per router that remains in inventory at the end ofthe month. If the monthly demand exceeds 100, Galaxy sells only the100 routers in stock. Galaxy assigns a shortage cost of $30 foreach unit of demand that is unsatisfied to represent aloss-of-goodwill among its customers. Management would like to usea simulation model to analyze this situation.

A) What is the average monthly profit resultingfrom its policy of stocking 100 routers at the beginning of eachmonth? Round your answer to the nearest whole number.$_4246_ B) What is theproportion of months in which demand is completely satisfied?_52_% C) Use the simulation model to compare theprofitability of monthly replenishment levels of 100, 120, and 140routers. Which monthly replenishment level maximizes profitability?_120_ Use the corresponding 95% confidence intervals on theaverage profit to make your comparison. Lower Bound: $_________ Upper Bound: $_________