Week 12

Question 1

Simulations Component

Answer 1

Decision Variable
Random Variable
Objective Function

Question 2

Decision Variable
Random Variable
Objective Function

Answer 2

Decision Variable
Variable that we want to make (e.g. Quantity to order)

Random Variable
Variable that will take place randomly (e.g. Demand) -> Need to be replicated many times

Objective Function
Summary and what we should do (Order quantity best for profit)

Question 3

Which to max or min

Answer 3

Revenue = Min that we will get from the order quantity according to the demand
=Unit_price*MIN(Order quantity of the demand)

Cost = unit cost x order quantity

Refund = Max amount of refund we might get
=Unit_refund*MAX(Order_quantity - demand)