Question Set 1.

IDS 355

Spring 2018

Assignment 5

Due Friday 4/27/2018

40 points

Instructions

Deadline

This assignment may be submitted anytime until Friday, April 27th at 11:59pm. Due to the proximity to the end of the semester, late submissions will not be accepted. However, you can still receive a three-day extension as long as you request it by Wednesday. As usual, we strongly recommend submitting your assignment early, in case problems arise with the submission.

Problem Guidelines

Because using spreadsheet software is a basic business skill, the assignments are intended to give you practice in structuring problems as well as simply finding the answers. All problems must be solved using Excel formulas to receive credit. If, for example, you solve a problem on paper and then copy the results to Excel, you will receive no credit for that problem.

Submission Guidelines

All assignments are to be submitted using the Blackboard site for your lab section. Assignments should be uploaded using the upload link in the Assignment folder, not the digital dropbox. It is important that all homework files use the following file naming system, so they can be easily identified and sorted. The file containing homework assignment 5 submitted by the student with NetID rbaker2 should be named rbaker2hw5.

For this assignment, please submit one Excel file. This assignment uses only one worksheet; it should be labeled “Q Set 1”. Be sure to label all results clearly.

Questions

Question Set 1.

You are an inventory management consultant. You have been hired by Whole Foods to help optimize inventory management for their produce department. Your immediate task is building a Monte Carlo simulation for sales of apples, oranges, and bananas. The probabilities of daily demand levels are:

Probability	Apples	Oranges	Bananas
0.10	225	344	266
0.15	259	394	300
0.25	278	423	319
0.25	290	441	331
0.15	309	470	350
0.10	343	520	384

The unit revenues and costs are given in the table below.

Fruit	Unit Revenue	Unit Cost
Apple	$1.20	$0.75
Orange	$1.05	$0.60
Banana	$0.50	$0.25

1. (5pts) Build a table for the cumulative probability distribution for demand. It should be set up for use with the VLOOKUP function, with the cumulative probabilities on the left.

2. (15pts) Build a table for tracking sales over one week (Sunday 11/1 through Saturday 11/7/2018) with separate columns for apples, oranges, and bananas. This will just be the randomized demand value for each fruit for each day (like in 10.1.2 from the lab exercise on Monte Carlo simulations). For this assignment, assume all demand is actually met (that is, sales = demand) and there is no spoilage.

3. (10pts) Build a table for tracking total revenues, costs, and profit for the week. This table should use the information provided in your answer to 2., above. Your table should calculate values for:

· Total Revenue (based on the combined sales of all three fruits over the week)

· Total Goods Cost (also based on combined sales)

· Fixed Costs (assume the weekly cost for store space is $150 for each fruit display, so $450 total)

· Profit/Loss (total revenue minus total costs)

4. (10pts) Create a data table to generate 50 runs of the simulation. As in previous assignments, this must be an actual data table structure to earn full credit. Calculate the average profit over the 50 simulation runs.