14-25 Stephanie Robbins is the Three Hills Power Company management analyst assigned to simulate maintenance costs. In Section 14.6 we describe the simulation of 15 generator breakdowns and the repair times required when one repairperson is on duty per shift.

The total simulated maintenance cost of the current system is $4,320. Robbins would now like to examine the relative cost-effectiveness of adding one more worker per shift. The new repairperson would be paid $30 per hour, the same rate as the first is paid. The cost per breakdown hour is still $75. Robbins makes one vital assumption as she begins—

that repair times with two workers will be exactly one-half the times required with only one repairperson on duty per shift. Table 14.13 can then be restated as follows: DEMAND PER WEEK 0 1 2 3 4 Probability 0.20 0.40 0.20 0.15 0.05 The lead time, in weeks, is described by the following distribution: LEAD TIME (WEEKS) 1 2 3 Probability 0.15 0.35 0.50 Based on cost considerations as well as storage space, the company has decided to order 10 of these each time an order is placed. The holding cost is $1 per week for each unit that is left in inventory at the end of the week. The stockout cost has been set at $40 per stockout. The company has decided to place an order whenever there are only two refrigerators left at the end of the week. Simulate 10 weeks of operation for Dumoor Appliance assuming there are currently 5

units in inventory. Determine what the weekly stockout cost and weekly holding cost would be for the problem. 14-22 Repeat the simulation in Problem 14-21, assuming that the reorder point is 4 units rather than 2. Compare the costs for these two situations. 14-23 Simkin’s Hardware Store simulated an inventory ordering policy for Ace electric drills that involved an order quantity of 10 drills with a reorder point of 5. The first attempt to develop a cost-effective ordering strategy is illustrated in Table 14.8. The REPAIR TIME REQUIRED (HOURS)

PROBABILITY 0.5 0.28 1 0.52 1.5 0.20 1.00 (a) Simulate this proposed maintenance system change over a 15-generator breakdown period. Select the random numbers needed for time between breakdowns from the second-from-thebottom row of Table 14.4 (beginning with the digits 69). Select random numbers for generator repair times from the last row of the table (beginning with 37). (b) Should Three Hills add a second repairperson each shift?