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Popa Ltd trade in a perishable commodity. Each day Popa Ltd. receives supplies of the goods from a wholesaler but the quantity supplied is a random variable, as is the subsequent retail customer demand for the commodity. Both supply and demand are expressed in batches of 50 units and over the past working year (300 days), Popa Ltd. has kept records of supplies and demands. The results are given below:

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Popa Ltd. buys the commodity at Rs 6 per unit and sells at Rs 10 per unit. At present unsold units at the end of the day are worthless and there are no storage facilities. Popa Ltd. estimates that each unit of unsatisfied demand on any day costs them Rs 2. Using the random numbers: 8, 4, 8, 0, 3, 3, 4, 7, 9, 6, 1 and 5

(a) simulate six days trading and estimate the annual profit.

(b) repeat the exercise to estimate the value of storage facilities.

 

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