Provided by Professor Aungst, Supplemental Instruction – Students bought an $18,000 copier to start their own copy business. – Wanted to purchase a smaller copier for $8,000 as back-up – Created a simulation to estimate the amount of revenue that would be lost if they did not have a backup – Time between breakdowns is 0 weeks to 6 weeks (see probability function on page 679, and provided later in this set up – Developed following probability distribution of repair times: – Estimated they would sell between 2,000 and 8,000 copies per day at 10 cents (0.10) per copy – Used a uniform probability distribution between 2,000 and 8,000 to estimate how many copies they would sell per day – If loss of revenue due to machine downtime during 1 year is greater than or equal to $12,000, then they should purchase the back-up copier – Decided to conduct a manual simulation of this process for 1 year to see if the model was working correctly
Provided by Professor Aungst, Supplemental Instruction – Students bought an $18,000 copier to start their own copy business. – Wanted to purchase a smaller copier
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