MGMT20005 Business Decision Analysis Tutorial 10: Monte Carlo Simulation I Question 1: For the past 50 days, daily sales of laundry detergent in a large grocery store have been recorded (to the nearest 10). Units Sold 30 40 50 60 70 Number of Times 8 12 15 10 5 a. Determine the relative frequency for each number of units sold. b. Suppose that the following random numbers were obtained using Excel: .12 .96 .53 .80 .95 .10 .40 .45 .77 .29 Use these random numbers to simulate 10 days of sales. Question 2: A pastry store wants to know how many dozen muffins to bake each day. Every dozen they sell fresh in the shop returns a profit of $5.00. Every dozen they bake but do not sell on the day they are baked is given to a local charity at a loss of $3.00 a dozen. The business is fairly stable in that they never sell less than 50 dozen nor more than 80 dozen muffins. Their sales history, rounded to the nearest ten dozen muffins is as shown: Dozens of Number of Days Muffins Sold That many Sold 50 12 60 37 70 45 80 18 They want to run a ten day simulation for production rates of 50, 60, 70, and 80 muffins to determine the profit (loss) for each. They generated the following random numbers for days 1‑10 respectively: .63, .13, .67, .50, .71, .25, .46, .00, .56, and .68. a. Specify the random numbers range corresponding to each muffins-sold quantity. b. Simulate 10 days of sales using four different daily production quantities: 50, 60, 70, and 80 muffins per day. For each production quantity, compute the average daily profit.