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Galaxy Co. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 157 units and a standard deviation of 41 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 140, Galaxy sells only the 140 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation. (Use at least 1,000 trials.) (a) What is the average monthly profit (in dollars)? (Round your answer to the nearest integer.) $ (b) What is the proportion of months in which demand is completely satisfied? (Round your answer to three decimal places.) Galaxy Parameters Wholesale Price $150 Retail Price $300 Holding Cost per Unit $20 Shortage Cost per Unit $40 Demand Model Replenishment Level Trial 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 71 140 Demand (Normal Distribution) Mean Standard Deviation Unmet Demand (RL=140) Monthly Net Profit (RL=140) Monthly Net Profit Statistics Count Avg. Profit (RL=140) 0 #DIV/0! Standard Deviation of Profit (RL = 140) #DIV/0! P(Unmet Demand = 0) when RL=140 #DIV/0!

Galaxy Co. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 157 units and a standard deviation of 41 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 140, Galaxy sells only the 140 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation. (Use at least 1,000 trials.) (a) What is the average monthly profit (in dollars)? (Round your answer to the nearest integer.) $ (b) What is the proportion of months in which demand is completely satisfied? (Round your answer to three decimal places.) Galaxy Parameters Wholesale Price $150 Retail Price $300 Holding Cost per Unit $20 Shortage Cost per Unit $40 Demand Model Replenishment Level Trial 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 71 140 Demand (Normal Distribution) Mean Standard Deviation Unmet Demand (RL=140) Monthly Net Profit (RL=140) Monthly Net Profit Statistics Count Avg. Profit (RL=140) 0 #DIV/0! Standard Deviation of Profit (RL = 140) #DIV/0! P(Unmet Demand = 0) when RL=140 #DIV/0!

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...
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Galaxy Co. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 157 units and a standard deviation of 41 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 140, Galaxy sells only the 140 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation. (Use at least 1,000 trials.) (a) What is the average monthly profit (in dollars)? (Round your answer to the nearest integer.) $ (b) What is the proportion of months in which demand is completely satisfied? (Round your answer to three decimal places.)
Transcribed Image Text:Galaxy Co. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 157 units and a standard deviation of 41 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 140, Galaxy sells only the 140 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation. (Use at least 1,000 trials.) (a) What is the average monthly profit (in dollars)? (Round your answer to the nearest integer.) $ (b) What is the proportion of months in which demand is completely satisfied? (Round your answer to three decimal places.)
Galaxy Parameters Wholesale Price $150 Retail Price $300 Holding Cost per Unit $20 Shortage Cost per Unit $40 Demand Model Replenishment Level Trial 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 71 140 Demand (Normal Distribution) Mean Standard Deviation Unmet Demand (RL=140) Monthly Net Profit (RL=140) Monthly Net Profit Statistics Count Avg. Profit (RL=140) 0 #DIV/0! Standard Deviation of Profit (RL = 140) #DIV/0! P(Unmet Demand = 0) when RL=140 #DIV/0!
Transcribed Image Text:Galaxy Parameters Wholesale Price $150 Retail Price $300 Holding Cost per Unit $20 Shortage Cost per Unit $40 Demand Model Replenishment Level Trial 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 71 140 Demand (Normal Distribution) Mean Standard Deviation Unmet Demand (RL=140) Monthly Net Profit (RL=140) Monthly Net Profit Statistics Count Avg. Profit (RL=140) 0 #DIV/0! Standard Deviation of Profit (RL = 140) #DIV/0! P(Unmet Demand = 0) when RL=140 #DIV/0!
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