1. (ww, 1188:2) A news vendor sells newspapers and tries to maximize profits.

The number of
papers sold each day is a random variable. However, analysis of the past month’s data shows
the distribution of daily demand in Table 1. A paper costs the vendor Rp 2.000. The vendor
sells the paper for Rp 3.000. Any unsold papers are returned to the publisher for a credit of
Rp 1.000. Any unsatisfied demand is estimated to cost Rp 1.000 in goodwill and lost profit. If
the policy is to order a quantity equal to the preceding day’s demand, determine the average
daily profit of the news vendor by simulating this system. Assume that the demand for day 0
is equal to 32.
Table 1
Demand per Day Probability
30 0,05
31 0,15
32 0,22
33 0,38
34 0,14
35 0,06

2. (ww, 1188:3) An airport hotel has 100 rooms. On any given night, it takes up to 105
reservations, because of the possibility of no-shows. Past records indicate that the number of
daily reservations is uniformly distributed over the integer range [96,105]. That is, each
integer number in this range has an equal probability, 0,01, of showing up. The no-shows are
represented by the distribution in Table 2. Develop a simulation model to find the following
measures of performance of this booking system; the expected number of rooms used per
night and the percentage of nights when more than 100 rooms are claimed.
Table 2
Number of No-Shows Probability
0 0,10
1 0,20
2 0,25
3 0,30
4 0,10
5 0,05

3. (ww, 1189:5) A salesperson in a large bicycle shop is paid a bonus if he sells more than 4
bicycles a day. The probability of selling more than 4 bicycles a day is only 0,40. If the number
of bicycles sold is greater than 4, the distribution of sales is as shown in Table 3. The shop has
four different models of bicycles. The amount of the bonus paid out varies by type. The bonus
for model A is Rp 100.000; 40% of the bicycles sold are of this type. Model B accounts for 35%
of the sales and pays a bonus of Rp 150.000. Model C has a bonus rating of Rp. 200.000 and
makes up 20% of the sales. Finally, model D pays a bonus ofr Rp. 250.000 for each sale but
accounts for only 5% of the sales. Develop a simulation model to calculate the bonus a
salesperson can expect in a day.
Table 3
No. of Bicycles Sold Probability
5 0,35
6 0,45
7 0,15
8 0,05
4. (ww, 1189:7) Suppose we are considering the selection of the reorder point, R, of a (Q, R)
inventory policy. With this policy, we order up to Q when the inventory level falls to R or less.
The probability distribution of daily demand is given in Table 4. The lead time is also a random
variable and has the distribution in Table 5. We assume that the “order up to” quantity for
each order stays the same at 100. Our interest here is to determine the value of the reorder
point, R, that minimizes the total variable inventory cost. This variable cost is the sum of the
expected inventory carrying cost, the expected ordering cost, and the expected stockout cost.
All stockouts are backlogged. That is, a customer waits until an item is available. Inventory
carrying cost is estimated to be Rp. 2.000/unit/day and is charged on the units in inventory at
the end of a day. A stockout costs Rp. 1.000 per order. Orders arrive at the beginning of a day.
Develop a simulation model to simulate this inventory system to find the best value of R.
Table 4
Daily Demand (units) Probability
12 0,05
13 0,15
14 0,25
15 0,35
16 0,15
17 0,05

Table 5
Lead Time (days) Probability
1 0,20
2 0,30
3 0,35
4 0,15

5. (ww, 1189:8) A large car dealership in Bloomington, Indiana, employs five salespeople. All
salespeople work on commission; they are paid a percentage of the profits from the cars they
sell. The dealership has three types of cars: luxury, midsize, and subcompact. Data from the
past few years show that the car sales per week per salesperson have the distribution in Table
6. If the car sold is a subcompact, a salesperson is given a commission of Rp. 2.500.000. For a
midsize car, the commission is either Rp. 4.000.000 or Rp. 5.000.000, depending on the model
sold. On the midsize cars, a commission of Rp. 4.000.000 is paid out 40% of the time, and Rp.
5.000.000 is paid out the other 60% of the time. For a luxury car, commission is paid out
according to three separate rates: Rp. 10.000.000 with a probability of 35%, Rp. 15.000.000
with a probability of 40%, and Rp. 20.000.000 with a probability of 25%. If the distribution of
type of cars sold is as shown in Table 7, what is the average commission for a salesperson in a
week?
Table 6
No. of Cars Sold Probability
0 0,10
1 0,15
2 0,20
3 0,25
4 0,20
5 0,10
 Table 7
Type fo Car Sold Probability
Subcompact 0,40
Midsize 0,35
Luxury 0,25

6. (ww, 1212:1) Our bookstore must determine how many 2021 nature calendars to order in
August 2020. It costs Rp. 20.000 to order each calendar, and we sell each calendar for Rp.
45.000. After January 1, 2021, leftover calendars are returned for Rp. 7.500. Our best guess is
that the number of calendars demanded is governed by the following probabilities.
a. How many calendars should we order?
b. If the bookstore receives no money for the first 50 excess calendars returned, but still
receives Rp. 7.500 for each subsequent calendar returned, does this change the optimal
order quantity?
Table 8
Demand Probability
100 0,03
150 0,02
200 0,03
250 0,15
300 0,05

7. (ww, 1221:2) In August 2020, a car dealer is trying to determine how many 2021 cars should
be ordered. Each car ordered in August 2020 costs Rp. 100.000.000. The demand for the
dealer’s 2021 models has the probability distribution shown in Table 9. Each car sells for Rp.
150.000.000. If demand for 2021 cars exceeds the number of cars ordered in August, the
dealer must reorder at a cost of Rp. 120.000.000 per car.
a. Use simulation to determine how many cars should be ordered in August. For your
optimal order quantity, find a 95% confidence interval for expected profit.
b. Suppose the demand for cars is normally distributed with mean of 40 and standard
deviation of 7. Use simulation to determine an optimal order quantity. For your
optimal order quantity, determine a 95% confidence interval for expected profit.
Table 9
No. of Cars Demanded Probability
20 0,30
25 0,15
30 0,15
35 0,20
40 0,20

8. (ww, 1222:4) A Health Benefit Fund allows you to put money into an account at the beginning
of the calendar year to use for medical expenses. This amount is not subject to tax. As you pay
medical expenses during the year, you are reimbursed by the administrator of the Fund, until
the account is exhausted. The catch is, however, that any money left in the Fund at the end
of the year is lost to you. You estimate that it is equally likely that your medical expenses for
next year will be Rp. 30.000.000, Rp. 40.000.000, Rp. 50.000.000, Rp. 60.000.000, atau Rp.
70.000.000. Your tax rate is 40%. Assume your annual salary is Rp. 500.000.000.
 a. How much should you put in a Fund? Consider both expected disposable income and
the standard deviation of disposable income in your answer. (Hint: Your simulation
will indicate that two options have nearly the same expected disposable income.)
b. Does your annual salary influence the correct decision?
9. (ww, 1222:6) Six months before its annual convention, Ikatan Dokter Indonesia must
determine how many rooms to reserve. At this time, IDI can reserve rooms at a cost of Rp.
500.000 per room. IDI must pay Rp. 500.000 room cost even if the room is not occupied. IDI
believes that the number of doctors attending the convention will be normally distributed,
with a mean of 5.000 and a standard deviation of 1.000. If the number of people attending
the convention exceeds the number of rooms reserved, extra rooms must be reserved at a
cost of Rp. 800.000 per room. Use simulation to determine the number of rooms that should
be reserved to minimize the expected cost to IDI.
10. (ww, 1223:2 NPV triangular) Wuling is trying to estimate the cash flows from a new car that
will sell for 5 years. During the current year (year 0), a fixed development cost of Rp. 1,4 trillion
is incurred. This cost is depreciated on a straight-line basis over the next 5 years. Year 1 unit
sales of the new model are assumed to follow a triangular random variable with worst case of
10.000 units, most likely case of 15.000 units, and best case of 17.000 units. Sales during years
2 – 5 are assumed to decay at the same rate each year. This annual decay rate is assumed to
follow a triangular random variable with best case of 5%, most likely case of 8%, and worst
case of 10%. Each year, a car sells for Rp. 150.000.000. During year 1, each car sold incurs a
variable cost of Rp. 100.000.000. Due to increased labor costs, the variable cost of producing
the car increases 4% a year. The tax rate is 40%,a dn cash flows are discounted at 15% a year.
(Assume all cash flows occur at the end of the year.)
a. Estimate the mean NPV of the cash flows from the new car.
b. What fraction of the time will the new model add value to Wuling?
11. (ww, 1227: NPV triangular discrete Uniform tornado) Kalbe is producing a new drug that will
be sold for 10 years. Year 1 unit sales are assumed to follow a triangular random variable with
worst case 100.000 units, most likely case 150.000, and best case 170.000. The year 0 fixed
cost of developing the drug is Rp. 1,6 trillion, to be depreciated on a 10-year straight-line basis.
Sales are equally likely to increase for 3, 4, 5, or 6 years, with the average percentage increase
during those years following a triangular random variable with worst case 5%, most likely case
8%, and best case 10%. During the remainder of the 10-year sales life of the drug, unit sales
will decrease at a rate governed by a triangular random variable having best case 8%, most
likely case 12%, and worst case 18%. During each year, a unit of the drug sells for Rp.
150.000.000. Year 1 variable cost of producing a unit of the drug is Rp. 100.000.000. The unit
variable cost of producing the drug increases at 4% a year.
a. Estimate the mean NPV of the drug’s cash flows.
b. What is the probability that the drug will add value to Kalbe?
c. What source of uncertainty is the most important driver of the drug’s NPV?
12. (ww, 1233:4) Timbul, an independent contractor, has agreed to build a new room on an
existing house. He plans to begin work on Monday morning, June 1. The main question is when
he will compete his work, given that he works only on weekdays. The owner of the house is
particularly hopeful that the room will be ready by Saturday, June 27, that is , in 20 or fewer
working days. The work proceeds in stages, labeled A through J, as summarized in Table 10.
Three of these activities, E, F, and G, will be done by separate independent subcontractors.
The expected durations of the activities (in days) are shown in the Table. However, these are
only best guesses. Timbul knows that the actual activities times can vary because of
unexpected delays, worker illnesses, and so on. He would like to use computer simulation to
 see (1) how long the project is likely to take, (2) how likely it is that the project will be
completed by the deadline, and (3) which activities are likely to be critical.
13. (ww, 1240:5) Assume that the Hubble Telescope contains four large mirrors. The time (in
months) until a mirror fails follows a Weibull random variable with alpha = 25 and beta = 50.
a. For certain types of pictures to be useful, all mirrors must be working. What is the
probability that the telescope can produce these types of pictures for at least 5 years?
b. Certain types of pictures can be taken as long as at least one mirror is working. What
is the probability that these pictures can be taken for at least 7 years?
c. Certain types of pictures can be taken as long as at least two mirrors are working.
What is the probability that these pictures can be taken for at least 6 years?
14. (ww, 1242:6) The time until first failure of a refrigerator (in years) follows a Weibull random
variable with alpha = 6,7 and beta = 8,57. If a refrigerator fails within 5 years, we must replace
it with a new refrigerator costing Rp. 5.000.000. If the replacement refrigerator fails within 5
years, we must also replace that refrigerator with a new one costing Rp. 5.000.000. Thus, the
warranty stays in force until a refrigerator lasts at least 5 years.
a. Estimate the average warranty cost incurred with the sale of a new refrigerator. (Do
not worry about discounting costs.)
b. Suppose the warranty works as follows. If a refrigerator fails at any time within 5 years
of purchase, we give the consumer a prorated refund on the Rp. 5.000.000 purchase
price. For example, if the refrigerator fails after 4 years, we pay the customer Rp.
1.000.000. If the refrigerator fails after 3 years, we pay the customer Rp. 2.000.000.
Estimate our expected warranty expense per refrigerator sold.
15. (ww, 1244:1) Suppose an auto engine consists of 12 components in series. The mean lifetime,
Weibull-distributed, of each component is 5 years, with a standard deviation of 2 years.
a. What is the probability that the engine will work for at least 2 years?
b. If the engine were a parallel system, what is the probability that the engine would
work for at least 10 years?
c. If at least 8 engine components need to work for the engine to work, what is the
probability that the engine will work for at least 7 years?
16. (ww, 1244:2) An aircraft engine lasts an average of 5 years, Weibull-distributed, with a
standard deviation of 3 years before it needs to be replaced. Consider a plane with 4 new
engines. On the average, how long will it be until an engine needs to be replaced?
17. (ww, 1244:3) A one km length of street has 5 street lights, equally spaced. The mean life,
Weibull-distributed, is 3 years, with a standard deviation of 1 year. Assume that all 5 lights
have just been replaced. The street is considered too dark if at least one part of the street has
no light working within 0,5 km. On the average, how long will it be until the street is considered
too dark?
18. (ww, 1244:5) The time to failure of a TV picture tube averages 5 years, Weibull-distributed,
with a standard deviation of 3 years. It costs an average of Rp. 2.500.000 to repair or replace
a TV picture tube. Determine fair prices for a 3-year, 4-year, or 5-year warranty.
19. (ww, 1268:15) You are going to make a bid on a construction project. You believe it will cost
you Rp. 100.000.000 to complete the project. Four competitors are going to bid against you.
Based on past history, you believe that each competitor’s bid is equally likely to be any value
between your cost of completing the project and triple your cost of completing the project.
You also believe that each competitor’s bid is independent of the other competitors’ bids.
a. What bid maximizes your expected profit?
b. If the number of competitors were to double, how would the optimal bid change?
 c. Back to part a, if each competitor’s bid follows U(15, 25) random variables, would the
optimal bid increase or decrease?
d. Repeat part c with U(18, 22).
20. (