Table 35 – 1 provides the historical frequency

distributions for balloon demands

Table 35 - 1 FREQUENCY DISTRIBUTION FOR Table 35-2 PROBABILITY DISTRIBUTIONS FOR MYLAR LEAD TIME
DAILY MYLAR BALLOON DEMAND AND PROPORTION OF ORDER FILLED
PROPORTION
Balloons OF ORDERED
Number of Per LEAD TIME (DAYS) PROBABILITY FILLED PROBABILITY
Customers Proportion Customer Proportion 2 0.10 0.75 0.10
15 0.05 1 0.20 3 0.15 0.8 0.20
16 0.10 2 0.15 4 0.20 0.85 0.25
17 0.15 3 0.10 5 0.20 0.9 0.30
18 0.15 4 0.07 6 0.15 0.95 0.10
19 0.10 5 0.07 7 0.10 1 0.05
20 0.10 6 0.06 8 0.10 1.00
21 0.10 7 0.06
22 0.08 8 0.05
23 0.07 9 0.05 Table 35-2 shows the probability distributions assumed for
24 0.06 10 0.04 each order. The supplier is rarely able to fill the entire order,
25 0.04 11 0.04 and shorted items are not backordered from the supplier.
12 0.04
13 0.03
14 0.02
15 0.02
Objective:

Set up a schedule of random number assignments for number of customers. Demand per customer, lead
time, proportion of order filled and whether or not a customer leaves without buying anything when the
store is out of Mylar stock
 INTERVAL OF
Number of CUMULATIVE
TABLE 1 Customers
Proportion
PROBABILITY
RANDOM
NUMBERS
15 0.05 0.05 01 to 05
16 0.10 0.15 06 to 15
17 0.15 0.30 16 to 30
18 0.15 0.45 31 to 45
19 0.10 0.55 46 to 55
20 0.10 0.65 56 to 65
21 0.10 0.75 66 to 75
22 0.08 0.83 76 to 83
23 0.07 0.90 84 to 90
24 0.06 0.96 91 to 96
25 0.04 1.00 97 to 100

Step 1 is to generate cumulative probability is the probability that a variable (demand) will be less than or
equal to a particular value.

Step 2:Setting Random Number Intervals. Established a cumulative probability distribution for each variable
included in the simulation by assigning a set of numbers to represent each possible value or outcome.
These are referred to as random number intervals
 RANDOM Simulated TABLE 2
NUMBER OF Daily
DAY CUSTOMER Customer
1 52 19 Step 3: Generate Random Numbers. Assigned Random number on excel file using
2 12 16 formula
3 18 17 = random between(1,100). Simulating the Experiment. We can simulate outcomes of an
4 100 25 experiment by simply selecting random numbers from Table 1. Beginning anywhere in
5 62 20 the table, we note the interval in Table 1 into which each number falls. For example, if
6 43 18 the random number chosen is 52 and the interval 46 to 55 represents number of
7 85 23 customers per day, we input a simulated daily customer of 19 in Table 2.
8 16 17
9 21 17
10 77 22 Last step is simulating series of trials. As in this case we simulate 20 days trial as with the
11 27 17 succeeding slide to get the number of Customer, demand per customer and order filled.
12 17 17
13 7 16
14 46 19
15 61 20
16 13 16
17 60 20
18 64 20
19 31 18
20 9 16 324 TOTAL NO OF CUSTOMER, 20 DAYS
16.20 AVERAGE CUSTOMER PER DAY
 Balloons INTERVAL OF Expected SIMULATED NO OF
Per CUMULATIVE RANDOM Demand / RANDOM BALLOONS PER
Frequency Customer Proportion PROBABILITY NUMBERS Customer DAY NUMBER CUSTOMER
20.00 1 0.20 0.20 1 to 20 0.20 1 96 13
15.00 2 0.15 0.35 21 to 35 0.30 2 45 3
10.00 3 0.10 0.45 36 to 45 0.30 3 44 3
7.00 4 0.07 0.52 46 to 52 0.28 4 25 2
7.00 5 0.07 0.59 53 to 59 0.35 5 56 5
6.00 6 0.06 0.65 60 to 65 0.36 6 6 1
6.00 7 0.06 0.71 66 to 71 0.42 7 34 2
5.00 8 0.05 0.76 72 to 76 0.40 8 61 6
5.00 9 0.05 0.81 77 to 81 0.45 9 87 11
4.00 10 0.04 0.85 82 to 85 0.40 10 41 3
4.00 11 0.04 0.89 86 to 89 0.44 11 73 8
4.00 12 0.04 0.93 90 to 93 0.48 12 20 1
3.00 13 0.03 0.96 94 to 96 0.39 13 5 1
14 53 5
15 45 3
2.00 14 0.02 0.98 97 to 98 0.28 16 33 2
2.00 15 0.02 1.00 99 to 100 0.30 17 73 8
18 49 4
Balloons Per Customer 5.35
19 75 8
20 69 7

Same step done from previous slides % of Customer Buying and Not Interval of Random Numbers

70% of Customer Settle for

Rubber Balloons 1-70%

30% of Customer leave without

making a purchase 71-100%
 Customer 1

Ratio of Will Settle Leave without

Ballons Bought Proportioned of Customer for Rubber making Random Simulated
Day by Customer 1 Order Filled Buying Balloons Purchase DAYS Number Probability
1 4 90% 70% 1 1 75 70%
2 6 75% 70% 1 2 30 70%
3 10 85% 70% 1 3 14 70%
4 10 85% 70% 1 4 56 70%
5 12 95% 70% 1 5 56 70%
6 2 85% 30% 1 6 86 30%
7 2 90% 70% 1 7 51 70%
8 4 90% 70% 1 8 48 70%
9 3 80% 70% 1 9 11 70%
10 13 80% 70% 1 10 69 70%
11 1 100% 70% 1 11 57 70%
12 9 90% 30% 1 12 85 30%
13 1 90% 30% 1 13 92 30%
14 10 100% 70% 1 14 85 30%
15 3 100% 70% 1 15 77 30%
16 2 95% 70% 1 16 61 70%
17 10 75% 30% 1 17 88 30%
18 7 80% 70% 1 18 18 70%
19 1 100% 70% 1 19 71 30%
20 2 90% 70% 1 20 58 70%
Total 5.6 16 4

Simulated 1 Sample customer for 20 days.