JET Copier Case Analysis In the case study for Jet copies three students are contemplating the benefits of opening a copy business in their town. They are also trying to decide whether or not it would be a good investment to purchase a second copier, in case their main copy machine breaks down. The students have already purchased an $18000 copier to start their copy business. They are trying to determine if they should get a loan to purchase a smaller $8000 copier as back-up. The students estimated that they would sell between 2,000 and 8,000 copies per day at 10 cents per copy. The students determined that the time between main copier breakdowns would be from 0 to 6 weeks. The students determined that if the revenue loss for a 1 year period was greater than or equal to $12000, they would purchase the backup copier. A simulation was created to estimate the amount of revenue that would be lost if they did not have a back-up copy machine. The first step in creating the simulation was to determine the time between repairs. The probability function for time between repairs is x = 6*square root (sqrt) of r, where r is the generated random number. First, a random number was generated. The next step to determine the time between repairs was to use the probability function of x=6*sqrt of r. The results of this calculation were placed in the second column of the excel worksheet. A third column was created to determine the cumulative time between the breakdowns. The same process continued: finding a random number, using excel function RAND(), using the formula, x=6*sqrt of r to find the time between repairs, and then calculating the cumulative time between breakdowns until the cumulative time reached the 52 week mark.
The next step was to determine the time it took for the repair on the main copier to take. To determine the days between repairs on the main copier the following probability distribution was developed: Repair Time (days) | Probability | 1 | 0.20 | 2 | 0.45 | 3 | 0.25 | 4 | 0.10 |
The first step was once again generating a random number in excel (RAND() ), then placing this number in a column labeled r2. This random number was then compared to the probability chart. This was done by using the excel function of =VLOOKUP. The results of this were then placed in another excel column labeled repair times.