Service Management: Operations, Strategy, Information Technology 8th Edition by James Fitzsimmons,Mona Fitzsimmons,Sanjeev Bordoloi

Exercise 3

The Coast Guard maintains a lighted buoy in the harbor entrance to warn ships of a dangerous reef. The flashing beacon contains two high-intensity quartz halogen bulbs. The supplier has provided the following data on bulb life:

The estimated cost of dispatching a motor launch with a crew to the buoy to remove and replace the weatherproof cover over the bulbs is $50, and the bulbs cost $10 each. The time involved in replacing a bulb is negligible. Coast Guard regulations require that both bulbs work all the time.
a. Develop a Monte Carlo simulation model that will help the Coast Guard to decide between the following replacement policies: (1) Replace only the bulb that burns out or (2) replace both bulbs when one burns out.
b. Simulate five years of activity using random numbers from Appendix B. Discuss some questions of experimental design that this problem poses.
c. Can you think of other bulb replacement policies to test?