Mat 540 Assignment 1: Jet Copies

Assignment 1: Jet Copies

MAT 540 Quantitative Methods

Strayer Universities

Professor Bulyshev

October 27, 2013

University students James, Ernie and Terri decided to open a new copy center business called JET Copies. They borrowed $18,000 from Terrie’s parents to purchase their main copy machine. After the copy machine was purchased Ernie found out from a friend that the copy machine had frequent breakdowns; a breakdown between 1 and 6 weeks and often took 1 – 4 days for repair. In order to keep the business running between repairs the business owners are evaluating whether to purchase an $8,000 back up copy machine. They decided that if revenue lost per year was greater than $12,000 the additional copier purchase would be made.

JET Copies’ owners are putting together a simulation model to determine whether the purchase of another copy machine is necessary. I began with the probability of demand demonstrated below.

Probability of Weekly Demand |

| | |

P(X) | Cumulative | Repair Time (days) |

0.20 | 0.00 | 1 |

0.45 | 0.20 | 2 |

0.25 | 0.65 | 3 |

0.10 | 0.90 | 4 |

1.00 |   |   |

For the second component of the case, I was asked to find the number of days needed to repair the copier. To begin, I used the RAND() function in Excel to produce random values for column F6:F57. Once the RAND() function produced values, I copied and pasted just the values in column F6:F57 (to ensure the values would stay frozen and not continue to change). Once I had the random probabilities, I used the table given with the case (entered in cells B6:C9) to find the number of days need to repair. To find this information I used Excel function VLOOKUP, which matched the random probability to the cumulative probability column and whichever column the random fit into, Excel used the corresponding repair time (days) from column J. The VLOOKUP function was used and the information was entered into cells J6:J57, giving the information of number of days needed...