Jet Case Problem Analysis James, Ernie, and Essay

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JET Case Problem Analysis

James, Ernie, and Terri decides to open a business named JET Copies after discovering that they will make nice profits from by establishing a copier business at State University. However, they discover that they have to tackle the problem of machine breakdown after raising loan of $18,000 from Terri's parent. The breakdown if not properly manage will lead to lost of revenue. They decide to buy a smaller version of copier machine for $8,000 to be used as a back up in case of a breakdown of the original machine. Before buying a back-up machine, they decide to estimate the lost revenue if they do not have a backup machine. If the lost revenue within a year is more than $12,000, it will be of a business advantage to purchase a back-up copier machine. (Taylor, 2011).

Objective of this paper is use stimulation model to investigate the lost revenue, days-to-repair ad interval between breakdowns of Jet Copies. The method assist in revealing the lost revenue that will occur due to a breakdown of the machine for 1 year.

The study also delivers the written explanation/description and Excel spreadsheet to the case problem.

The attached spreadsheet provides the answers to the question 1, 2, 3, and 4. The Appendix 1 also provides the copy of the excel spreadsheet.

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5. "Description and Explanation of the model (days-to-repair, lost revenue interval between breakdowns, and putting it together)."

Interval between Breakdowns

Based on the continuous distribution information provided in the case study, the random distribution probability for the machine breakdowns varies between 0 and 6 weeks. The study stimulates random number to stimulate the interval between successful breakdown and the study multiple the results by square root and 6. The strategy assists in generating number of breakdown. The study also generates cumulative number by adding number of weeks to get 52 weeks, which are the number of weeks in a year.

The stimulation process in the Excel spreadsheet is as follows:

The study stimulates the RN1 (Random Number 1) in B15:B42 using the =RAND ().

In column C, the formula =6*SQRT (B15) and the formula is copied into the cell C17:C42.

In the column D, the formula =D15+C17 are computed to stimulate the "Cumulative Number of Weeks" in the cells D17:D42.

Days-To-Repair

Information from the case study reveals the probability distribution for repair days as being delivered as follows:

Repair time

P (y)

y (days)

0.20

1

0.45

2

0.25

3

0.10

4

1.00

From the data provided above, the cumulative information is generated using the formula =A6+B6 in the cell B7, and the formula copy into the B8:B9......

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