Jets Copies Case

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JETS Copies Case MAT540: Quantitative Methods: Jeremy Frens Michigan State University Professor Name April 28, 2013 Background In the JET Copies Case, the class was asked to use simulation to estimate the loss of revenue due to copier breakdown for one year. Using the model prescribed by the textbook, students were to use a suitable method to generate the average number of days needed to repair the copiers, when it is out of service, according to the discrete distribution shown. In addition we were to simulate the interval between successive breakdowns according to the continuous distribution shown, as well as the simulating the lost revenue for each day the copier is out of service. Lastly, to put this together to simulate the lost revenue due to copier breakdowns oever 1 year to answer the question asked in the case study of whether it is beneficial to purchase a backup copier. Days to Repair Using the array given to us, we know that the repair time in days is between 1 and 4 days, and utilizing the formula =VLOOKUP the simulation works to find, based on a running model the average repair time. Running the simulation many times, the user gets something approximating 2.35 days with some deviation. Average Number of Weeks between Breakdowns The time between breakdowns was calculated by taking the x that was given (6) and multiplying it by the square root of the random variable. This was done for all 100 breakdowns, and then an average was derived by summing all 100 times and diving by 100 to get an average. Based on multiple simulations, the result is somewhere around every 4 weeks given the deviations. Lost Revenue Due to Breakdowns The revenue lost due to breakdowns was calculated through the median cost of $500 per breakdown, which is the median cost of the range of loss from 2,000 copies to 8,000 copies, multiplied by the repair time.

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