Jet Copies Case Summary

JET Copies was a copy company formed by 3 students attending the State University, James, Ernie, and Terri. They were frustrated with the circumstances of having to wait in line to use the copy machines at the Klecko's Copy Center. Klecko's was always busy and time consuming. James, Ernie, and Terri decided to open up and copying company at Southgate Apartments, where they resided. They stood to make a great profit pending on the expense repairs due to breakdowns of the copier and the net loss of revenue they stood to lose. The three decided to compile a simulation spreadsheet to see if purchasing another copier (due to breakdown times with the main copier) would be profitable. The following analysis was put together with the information provided and the final results were concluded.

Breakdowns - This column on the spreadsheet simply shows the number of times breakdowns occurred during a year's time to assist in the profitability of purchasing a second printer for back up. Within a year's time it is estimated that the copier would breakdown a number of 14 times.

Random numbers - Formulated as: =RAND(). Random numbers are generated to demonstrate how a computerized simulation model is developed by using Excel spreadsheet. These random numbers are generated by mathematical processes as opposed to a physical process, such as spinning a roulette wheel. Random numbers play a very important part in a probabilistic simulation. These numbers are consequently called pseudorandom numbers because they are generated by a mathematical process instead of a physical process.

Time Between Breakdowns - The equation for generating the time between breakdowns for this probability distribution is: 6*SQRT(R1). It is estimated that the machine would break down 0-6 weeks. The machine must be repaired and could take between 1-4 days to repair the machine according to the probability distribution on the spreadsheet. The owners of Jet Copies wanted to know and show how much it would cost every time the machine breaks down in order to justify buying another copier. James, Ernie, and Terry decided that if their loss of revenue due to machine downtime during 1 year was $12,000 or more, they should purchase a backup copier.

Cumulative Time - Cumulative Time in column H is computed by copying the formula =H5+G6 in cells H6:H18. This column will list time up to a year - 52 weeks, which is needed in this simulation. In showing the cumulative time - it narrows the number of breakdowns that would occur in a year and the time it takes to repair between breakdowns.

Days of Repair - Days of repair (column J) - In setting up the parameters for days of repair we will first cover the Cumulative and Repair Time of the Probability Distribution table (B5:C8). Give the range a name. In this case, I chose the name "Cumulative". In cell J5, the following formula