CMA Final · Strategic Cost Management · Simulation
A Monte Carlo simulation of daily demand for a Pune bakery uses the cumulative probability ranges: 0 units = 00-09, 1 unit = 10-39, 2 units = 40-79, 3 units = 80-99. Using the two-digit random numbers 05, 42, 91, 27 for four successive days, what is the total simulated demand over the four days?
Total simulated demand is 6 units. Random numbers 05, 42, 91 and 27 map to 0, 2, 3 and 1 units respectively through the cumulative probability ranges, and these sum to six units over the four days.
- A5
- B6Correct
- C7
- D8
Explanation
Map each random number: 05 falls in 00-09 so demand is 0; 42 falls in 40-79 so 2; 91 falls in 80-99 so 3; 27 falls in 10-39 so 1. Total = 0+2+3+1 = 6. Choosing 7 would result from wrongly mapping 27 as 2 units.
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