F(x) = x2/36, for 0 thru 6, this is the distribution function that can be further simplified r1 = x2/36, to simplify set the equation equal to r1 x = 6 * SQRT (r1), final equation. Lost Revenue Jet Copies demonstrates a uniform probability distribution as it pertains to the number of copies sold per day. The average sale is between 2,000 through 8,000 copies a day, at $0. 10 a copy. This number is denoted on the excel spreadsheet as r3 by generating a random number between 2,000 and 8,000.
To calculate the total amount of business lost on any given day, the following calculations utilized: Lost Revenue = repair time * r3 * 0. 10 The total amount of lost revenue is $20,166. 30. This number is not totally accurate, but is an approximation of lost. The amount will always change significantly because r1, r2, and r3 are numbers generated randomly. To get a close approximation the breakdown will have to consist of 365 to account for the total days in the year.
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Also, the lost revenue could be determined another way.
Too calculate this amount, multiple the repair days and the estimated number of loss customers, multiplied by the number of copies that could have been produced, not exceeding 365 days. It will benefit Jet Copies to purchase a new copier. Their lost revenue exceeds the cost of purchasing a new copier by $12,166. 30. Jet Copies could afford to purchase two new copiers at the loss Jet “Copies will experience. The answer illustrated in the excel spreadsheet I am very confident with. Regardless of how many times I run the simulation, the numbers will never be the same because they are random.
There are many limits to the study. First, the time up to a year will not always be accurate. Also, if you change one number, the whole spreadsheet numbers change. But of most importance, the simulation needs to be generated several times to come as close to accurate as possible, concerning revenue loss. Jet Copies’ simulation results are located in the Excel document uploaded to assignment 1. Reference Taylor, B. M. (2010). Introduction to Management Science (10th ed. ). Upper Saddle River, NJ: Pearson/Prentice Hall.