Asked by Amber Abugharbieh on Jul 21, 2024

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Create a distribution of random numbers that would result in average demand per period for a Monte Carlo simulation that is equivalent to the expected demand per period using the data given by the chart below.
 Demand  Probability  Cumulative  Probability  Interval of Random  Numbers 0.1.152.43.154.2\begin{array} { | c | c | c | c | } \hline \text { Demand } & \text { Probability } & \begin{array} { c } \text { Cumulative } \\\text { Probability }\end{array} & \begin{array} { c } \text { Interval of Random } \\\text { Numbers }\end{array} \\\hline 0 &. & & \\\hline 1 & .15 & & \\\hline 2 & .4 & & \\\hline 3 & .15 & & \\\hline 4 & .2 & & \\\hline\end{array} Demand 01234 Probability ..15.4.15.2 Cumulative  Probability  Interval of Random  Numbers 

Random Numbers

Sequences of numbers generated in such a way that each number has an equal chance of being any value within the defined range, used in simulations and probabilistic calculations.

Expected Demand

An estimate of the quantity of a product or service that consumers will purchase in the future, often used for planning and inventory management.

Demand Probability

The likelihood that a specific level of demand will occur within a certain period.

  • Master Monte Carlo simulation techniques for deployment in business-related scenarios.
  • Design sequences of random numbers reflecting the characteristics of probability distributions.
  • Estimate demand using historical data and probability distributions.
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KJ
Kamela JosephJul 26, 2024
Final Answer :
 Demand  Probability  Cumulative  Probability  Interval of Random  Numbers 0.1.101−101.15.2511−252.4.6526−653.15.866−804.2181−00\begin{array} { | c | c | c | c | } \hline \text { Demand } & \text { Probability } & \begin{array} { c } \text { Cumulative } \\\text { Probability }\end{array} & \begin{array} { c } \text { Interval of Random } \\\text { Numbers }\end{array} \\\hline 0 & .1 & .1 & 01 - 10 \\\hline 1 & .15 & .25 & 11 - 25 \\\hline 2 & .4 & .65 & 26 - 65 \\\hline 3 & .15 & .8 & 66 - 80 \\\hline 4 & .2 & 1 & 81 - 00 \\\hline\end{array} Demand 01234 Probability .1.15.4.15.2 Cumulative  Probability .1.25.65.81 Interval of Random  Numbers 01101125266566808100 This problem will most likely confuse many students, however its aim is to test their true understanding and ability to work both ways. The smallest common denominator for the probabilities is .05 so 20 separate random numbers must be generated for the simple solution where each possible demand has probability/.05 random numbers representing it within the set. For example, one set would be
(0, 0, 11, 11, 11, 26, 26, 26, 26, 26, 26, 26, 26, 66, 66, 66, 81, 81, 81, 81)
Students may also create sets that draw unevenly from various demand rows, such as drawing only from 0 and 4. The expected demand is 2.4, so students would solve a relation of the form X ∗ 0 + Y ∗ 4/(X + Y) = 2.4 thus X = 2Y/3 so when Y = 3 then X = 2. Therefore another possible set of random numbers would be (00, 00, 00, 01, 01)