Explanation on How to Solve Simulation in Decision Science.

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Unit No.3.
DECISION SCIENCE
Presented By:
Dr. V. M. Tidake
Ph. D (Financial Management), MBA(FM), MBA(HRM) BE(Chem)
Dean, EDP & Associate Professor MBA
1
Sanjivani College of Engineering, Kopargaon
Department of MBA
www.sanjivanimba.org.in

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302-DECISION SCIENCE
Unit No.3 Marko Chain & Simulation
3.2.2 Explanatory Case on
Simulation
Presented By:
Dr. V. M. Tidake
Ph. D (Financial Management), MBA(FM), MBA(HRM) BE(Chem)
Dean EDP & Associate Professor MBA
2
Sanjivani College of Engineering, Kopargaon
Department of MBA
www.sanjivanimba.org.in

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MARKOV CHAIN & SIMULATION
 At the End of the Session Student will be able to
understand-
A. Explanatory Case on Simulation

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SIMULATION
A bakery keeps stock of a popular brand of cakes. Previous
experience shows the daily demand pattern for the cakes
with associated probabilities as given below:
Use the following sequence of random numbers to
simulate the demand for the next 10 days. Also find the
average demand for the day.
Daily Demand (Units) 0 10 20 30 40 50
Probability 0.01 0.20 0.15 0.50 0.12 0.02

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SIMULATION
Step 1: Objective: To find Demand for next Period
Step 2: Cumulative Probability:
Daily Demand (Units) 00 10 20 30 40 50
Probability 0.01 0.20 0.15 0.50 0.12 0.02
Cumulative
Probability
0.01 0.21 0.36 0.86 0.98 1.00

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SIMULATION
Step 3: Find Random Number Interval:
Daily Demand
(Input Variable)
Probability Cumulative
Probability
Random Number
Interval
00 0.01 0.01 00-00
10 0.20 0.21 01-20
20 0.15 0.36 21-35
30 0.50 0.86 36-85
40 0.12 0.98 86-97
50 0.02 1.00 98-99

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SIMULATION
Step 4: Simulate the Demand for Next 10 Days:
Day Random No. Random No. Interval Daily Demand
1 25 21-35 20
2 39 36-85 30
3 65 36-85 30
4 76 36-85 30
5 12 01-20 10
6 05 01-20 10
7 73 36-85 30
8 89 86-97 40
9 19 01-20 10
10 49 36-85 30

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SIMULATION
Step 5: Average Demand for Next 10 Days:
Average Demand =
20+30+30+30+10+10+30+40+10+30
10
Average Demand = 24 Units/Day

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EXERCISE
 Solve the Explanatory Case on Simulation as
a classroom exercise.

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For More Details Contact
Dr. V M Tidake
tidkevishal@gmail.com
tidkevishalmba@sanjivani.org.in

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Thank You