Evolution and Revolution in the Hi-Fi Sector

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UNIVERSITY OF BEDFORDSHIRE
The Business School

BSS009-3 Business Forecasting and Simulation

Assignment Two (Simulation) – 2011/12

SIMULATION OF THE STOCK CONTROL SYSTEM FOR PRINTER CARTRIDGES

Computer Accessories Ltd. specialise in printer cartridges for a wide range of printers. Their most popular cartridge (Mostpopcart) accounts for a large percentage of their business, and as a result, they are keen on examining the stock control policy for this item.

The daily demand for Mostpopcart is as follows:

Daily
DemandProbability
200.40
300.30
400.20
500.10

Computer Accessories Ltd. re-order when the stock level is 70 printers or less and there is no order outstanding. The lead time (time between the order being placed and the goods arriving) is evenly distributed between 2 and 5 days (inclusive). Customers are willing to wait if Computer Accessories Ltd. are out of stock. The stock level is checked at the start of the day (once the delivery has arrived; all deliveries arrive at the start of the day), and if necessary, an order is placed. The amount re-ordered is enough to bring the stock level back up to 120 items after taking into consideration any outstanding orders from customers.

The costs are as follows:

Cost of placing an order£60
Daily stock holding cost£0.75
Stock-out cost£1.50 per printer per day.
Basic cost of printer£75

The suppliers of Computer Accessories Ltd. operate the following discount system:
Discount on
Quantity OrderdBasic Price
Less than 400%
Between 40 and 607.5%
Between 60 and 8012.5%
Between 80 and 10015%
Between 100 and12517.5%
Greater than 12520%

The starting stock level is 100 printers.

You are required to:

(1)Analyse the current system as best you can using appropriate analytical stock control models. Where necessary and possible, make (and clearly state) assumptions in order to be able to apply existing models.

(2)Build a simulation...
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