CMA Intermediate · Operations Management and Strategic Management · Simulation and Line Balancing
In a Monte Carlo simulation of a shop's daily demand, the probability distribution is: 10 units (0.20), 20 units (0.50), 30 units (0.30). Cumulative probabilities are 0.20, 0.70 and 1.00. Using random numbers 00-99, which range of random numbers should be assigned to a demand of 20 units?
The correct range is 20 to 69. Demand of 10 units uses 00-19 (20 numbers), so demand of 20 units, with probability 0.50, takes the next 50 numbers, 20 through 69. The remaining numbers, 70-99, go to demand of 30 units.
- A20 to 69Correct
- B21 to 70
- C20 to 70
- D50 to 99
Explanation
Demand of 10 units has cumulative probability 0.20, so it takes numbers 00-19. Demand of 20 units takes the next 50 numbers, 20-69. Demand of 30 takes 70-99. Option 21 to 70 shifts the range by one, and 20 to 70 contains 51 numbers.
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