he Paymore Rental Car Agency rents cars in a small town. It wants to determine how many rental cars it should maintain. Based on market projections and historical data, the manager has determined probability distributions for the number of rentals per day and rental duration (in days only) as shown in the following tables: Number of cust
The Paymore Rental Car Agency rents cars in a small town. It wants to determine how many rental cars it should maintain. Based on market projections and historical data, the manager has determined probability distributions for the number of rentals per day and rental duration (in days only) as shown in the following tables:
| Number of customers per day | Probability |
| 0 | .20 |
| 1 | .20 |
| 2 | .50 |
| 3 | .10 |
| Rental duration in days | Probability |
| 1 | .10 |
| 2 | .30 |
| 3 | .40 |
| 4 | .10 |
| 5 | .10 |
Design a simulation experiment for the car agency and simulate using a fleet of four rental cars for 10 days. Compute the probability that the agency will not have a car available upon demand. Should the agency expand its fleet? Explain how a simulation experiment could be designed to determine the optimal fleet size for the Paymore Agency.
Use the following random numbers in order (from left to right) for the simulation of number of customers per day:
| 0.62 | 0.48 | 0.96 | 0.86 | 0.86 | 0.29 | 0.79 | 0.22 | 0.08 | 0.62 |
Use the following random numbers in order (from left to right, first row first - as you need them) for the simulation of car rental duration in days.
| 0.19 | 0.66 | 0.27 | 0.43 | 0.20 | 0.92 | 0.22 | 0.91 | 0.46 | 0.49 | 0.66 | 0.09 |
| 0.81 | 0.05 | 0.91 | 0.97 | 0.24 | 0.01 | 0.27 | 0.69 | 0.18 | 0.06 | 0.53 | 0.97 |
| 0.13 | 0.21 | 0.97 | 0.09 | 0.26 | 0.47 | 0.62 | 0.89 | 0.76 | 0.24 | 0.10 | 0.90 |
Please conduct the simulation day by day using Word, Excel or pen and paper and then take a picture of your work.
Advice: Remember you are conducting the simulation manually and you are not supposed to use Excel formulas but rather show the process (however you can Excel to display your work!). Also, a car rented in day 1 with a duration of 2 days becomes available for rent in day 3 (assuming no repair, no delay in return, for simplicity). Please do not add your own assumptions, ideas into the question!
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