Exam 22: Simulation

Julie's Diamond Boutique is very concerned with its order policies related to one-carat diamond solitaires. Their current policy is to order 10 diamonds whenever their inventory reaches 6 diamonds (unless there is already an ordered delivery due). Currently there are 12 diamonds on hand. Orders are placed at the end of the month and take one month to arrive . The following distribution of monthly sales has been developed using historical sales. If Julie's Diamond Boutique does not have a diamond on hand, it will result in a lost sale. Use the following random numbers to determine the number of lost sales of one-carat solitaires at the store over 12 months. Random numbers for sales: 22, 12, 03, 48, 23, 82, 95, 28, 34, 61, 08, 88

Simulation provides optimal solutions to problems.

Which of the following is TRUE regarding simulation?

A simulation model is designed to arrive at a single specific numerical answer to a given problem.

State the three-fold idea behind simulation.

From a portion of a probability distribution, you read that P(demand = 0) is 0.05 and P(demand = 1) is 0.15. The cumulative probability for demand = 1 would be which of the following?

A distribution of service times at a waiting line indicates that service takes 12 minutes 30 percent of the time and 14 minutes 70 percent of the time. In preparing this distribution for Monte Carlo analysis, the service time 13 minutes would be represented by what random number range?

A simulation is "Monte Carlo" when the elements of a system being simulated exhibit chance in their behavior.

One effective use of simulation is to study problems for which the mathematical models of operations management are not realistic enough.

The numbers used to represent each possible value or outcome in a computer simulation are referred to as ________.

A distribution of service times at a waiting line indicates that service takes 6 minutes 30 percent of the time, 7 minutes 30 percent of the time, 8 minutes 20 percent of the time, and 9 minutes 20 percent of the time. In preparing this distribution for Monte Carlo analysis, the service time of 8 minutes would be represented by what random number range?

Similar to mathematical and analytical models, simulation is restricted to using the standard probability distributions.

Provide a small example illustrating how random numbers are used in Monte Carlo simulation.

One of the disadvantages of simulation is that it:

One reason for using simulation rather than an analytical model in an inventory problem is that the simulation is able to handle probabilistic demand and lead times.

The idea behind simulation is threefold: (1) to imitate a real-world situation mathematically, (2) then to study its properties and operating characteristics, and (3) finally to draw conclusions and make action decisions based on the results of the simulation.

A disadvantage of simulation is that it is a repetitive approach that may produce ________ solutions in repeated runs.

Which of the following is an idea behind simulation?