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Jet Copies Case Problem

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JET Copies Case Problem
Assignment #1

MAT540, Strayer University

Assignment#1: JET Copies Case Problem

According to the discrete distrubution, the number of days (y) needed to repair the copier is as follows (where “R2” is a random value in the excel sheet between and 0 and 1): 0 < R2 < .2, then it takes 1 day .2 < R2 < .65, then it takes 2 days .65 < R2 < .9, then it takes 3 days .9 < R2 < 1, then it takes 4 days

James estimated that the time between break-downs was probably between 0 and 6 weeks, with the probability increasing the longer the copier went without breaking down. For simulating the interval between successive breakdowns: f(x) = x/18, 0 ≤ x ≤ 6 weeks where x= weeks between break-downs f(x) = x²/36, 0 ≤ x ≤ 6 weeks where x= weeks between break-downs f(x) = random number1 (R1) = x²/36 x = 6*sqrt(R1) 3. For simulating the lost revenue every day that the copier is out of service, select a random number (R3) between 2000 and 8000, since it is estimated that they would see between 2000 and 8000 copies a day. They will charge $0.10 per copy. Therefore, the lost revenue for each day the copier is out of service is equal to R3*.1*repair time.
The amound of revunue lost is approxiamtely $12,934.80. Please see the attached excel sheet. In order to estimate the revenue lost for the one year of operations the simulation has been performed. The estimates indicated that the copies sales were between 2000 to 8000 pieces at $0.10 / piece. If the loss due to copier breakdown was incurred over $12000 a year the backup copier was needed. In the simulation the random distribution was used of repair times and the time between breakdowns. The lost revenue was calculated based on how many copies were not sold due to the copier breakdown (R3) at 0.10 per copy. The amount of revenue lost was found by looking at the days it took to repair the copier (y) by the amount of copies expected to make (R3) by the cost for each copy lost. The cumulative weeks were close to 52 as there are 52 weeks in a year.

6. In the simulation of over 52 weeks of operation the calculation has been performed and it indicated that the possible loss of revenue would be $12,934.80 which is more than $12000, so the conclusion has been drawn that the extra copier is needed.

The model has been created based on several assumptions such as a non-validated repair times and times between break-downs. If any of this data is faulty and the times exceed the assumptions the loss of revenue may be greater than expected. It may help to run this simulation several more times to reflect a more accurate answer. Also another very serious problem with this study is that the customer satisfaction is affected and if the service is not provided the long term sales may be seriously affected.

Attached: JET Copies Case Problem simulation file.
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