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Monte-carlo simulation in excel
Hey Guys..
Need help with the following question. Tried doing it on excel but getting the wrong answers. I probably have the wrong categories/formulaes etc etc.. would appreciate it if someone could help me. The School of Management (SoM) is organizing an annual convention in eight months which will gather all academics from around the country and must determine how many rooms to reserve from a hotel in Southampton. It is estimated from previous conferences that the number of participants to the conference who will require accommodation is normally distributed with a mean of 200 and a standard deviation of 40. The SoM can reserve each room At a cost of £60 per room. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be reserved at a cost of £80 per room. On the other hand, if the number of people requiring accommodation is less than the number of rooms reserved, the SoM will have to pay £20 per room as holding fee. The total number of rooms available at the hotel is 250, and the hotel requires that a minimum amount of 150 rooms to be booked and if more rooms need to be reserved, it should be done in increments of 50. Design a simulation experiment using Excel to determine the number of Rooms that should be reserved to minimise the total expected cost by • performing the simulation for each alternative, • constructing, for each alternative, a confidence interval for the Expected cost at a 90% confidence level such that the total length of The interval is no more than £100 (hint: you may need to change the Number of simulation runs you perform to reach this target), and • comparing the resulting confidence intervals to select the |
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