1. A professional football team is preparing its budget for the next year. One component of the budget is the revenue that they can expect from ticket sales. The home venue, Dylan Stadium, has five different seating zones with different prices. Key information is provided. The demands are all assumed to be normally distributed. Determine the distribution of total revenue under these assumptions using 50 trials. What the min, mean, max and standard deviation of the total ticket revenue?
2. Suppose that a small candy store makes Valentine’s Day gift boxes that cost $14.00 and sell for $21.00. In the past, at least 40 boxes have been sold by Valentine’s Day, but the actual amount is uncertain, and the owner has often run short or made too many. After the holiday, any unsold boxes are discounted 50% and are eventually sold. Set up and run a Monte Carlo simulation assuming that demand is triangular with minimum value=40, maximum value=50, and most likely value=47. Find the distribution of profit for order quantities between 40 and 50 to identify the best order quantity. Use 20 simulation trials.
3. Analyze the simulation model, with 50 trials, for Koehler Vision Associates (KVA) with the following assumptions. Assume that the no show rate is uniform, between 10% and 20% of prospective patients fail to show up or cancel their exam at the last minute. A $250 charge is applied as a deposit for the actual procedure. Patients that do not show up are refunded the charged fee less a $25 processing fee. KVA can handle 125 patients per week and is considering overbooking its appointments to reduce the lost revenue associated with cancellations. However, any patient that is overbooked may spread unfavorable comments about the company; thus, the overbooking cost is estimated to be $125. Determine the averages for the net profit and number overbooked for taking appointments between 130 and 150 patients in increments of 2. What would you recommend?
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