Exhibit 12.3 The Following Questions Use the Information Below

Essay

Exhibit 12.3
The following questions use the information below.
An auto parts store wants to simulate its inventory system for engine oil. The company has collected data on the shipping time for oil and the daily demand for cases of oil. A case of oil generates a $10 profit. Customers can buy oil at any auto parts store so there are no backorders (the company loses the sale and profit). The company orders 30 cases whenever the inventory position falls below the reorder point of 15 cases. Orders are placed at the beginning of the day and delivered at the beginning of the day so the oil is available on the arrival day. An average service level of 99% is desired. The following spreadsheets have been developed for this problem. The company has simulated 2 weeks of operation for their inventory system. The current level of on-hand inventory is 25 units and no orders are pending.
-A simulation model was replicated 100 times yielding a mean of 82.59 with variance of 17.66. Of the 100 replications, 11 replications yielded an outcome over a value of 100. What is the 90% confidence interval on the mean?
Instructions: Answer the following questions using the Analytic Solver Platform Excel add-in.