ITM 501 –Simulation project

1. The project analysis must be on an MS Excel file which must be submitted through Blackboard.

2. The first worksheet will simply act as a cover page for your project. You must include the full names and student numbers for all members of your group.

3. For the project problems, you may create as many worksheets as you see necessary. Make sure to include clear and explicit explanations of your model (by referring to specific columns/rows/cells, when necessary). This is intended for me to understand and evaluate your work.

4. Constructing a simulation model is not the final goal in this project. The final goal is to help the decision maker make better decisions. The simulation model you develop is a tool to make this happen. So, make sure to include a written summary of your analysis and justifications for your recommendations to the decision maker. Imagine that this summary is intended for the decision maker who understands the business problem, but does not necessarily know much about simulations or anything else you have learnt in this class.

5. The file should be named using the names of group members. Suppose Peyton Manning, Bill Gates, and Doris Lessing are in your group. Use at most the first five letters of the last name and the initial letter of the first name to name the file as follows:

ManniP_GatesB_LessiD.xlsx

Problem 1

As the branch manager of a large bank in your area, you are concerned about a loss of customers in your branch. One solution that has been proposed is to add one or more drive-through teller windows to make it easier for customers to obtain quick service without parking.

There has been a debate in your branch whether to add one or two drive-through tellers. Two drive-through tellers will definitely mean much less waiting time for your customers; however, there are also staffing and construction costs to be considered. You have gathered the following information. It will cost $30,000 per year in wages and benefits to staff each new drive-through window. The cost (amortized over a 20-year period) of building a drive-through window is $15,000 per year. However, amortized construction costs can be cut to a total of $24,000 per year if two drive-through windows are installed. According to a recent article, customers who wait in long lines for drive-through service will cost banks an average of $1 per minute (loss of goodwill).

You worked on the arrival and service rates of customers, by analyzing the data on regular (on-foot) customers for your branch as well as the competing banks’ drive-through windows in your area. You predict that service time is exponentially distributed with the service rate µ = 30 customers/hour (on average, you serve 30 customers every hour, that is, average service time is 2 minutes). The data on time between customer arrivals is as follows:

a) Simulate a one-hour time period for a system with one drive-through window. Replicate the model 250 times.

b) Simulate a one-hour time period for a system with two drive-through windows. Replicate the model 250 times.

c) What is the average queue length in both cases?

d) Conduct a cost analysis of the two options. Assume that the bank is open 7 hours per day and 200 days per year.

e) Conduct an analysis of the effect of annual wages and the waiting cost ($1/minute) on your decision.

Problem 2

Your first job was selling hot dogs at local softball games. Looking back, you may think that simulation would have been a great tool to decide how many hot dogs to order for a particular game. This year, it is your little brother’s turn to sell hot dogs and he comes to you for advice. You decide to set up a simulation model to help your brother.

Suppose that you are selling hot dogs for $1 each. For the next game on Saturday, you must decide how many hot dogs to order (170, 190, or 210), at a cost of $0.25 each. Any unsold hot dogs must be thrown away. If the game is interesting, fewer people will visit your hot dog stand. In such a case, you estimate that demand will be normally distributed, with a mean of 140 and a standard deviation of 20. However, if the game is a blowout, you expect more people to visit the stand. In this case, demand will be normally distributed with a mean of 190 and a standard deviation of 15. You predict that there is a 40% chance that the game will be a blowout.

Set up a simulation model and replicate it 200 times for each order size to determine your (a) expected profit, and (b) expected percentage of unsold hot dogs. What should

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.