Question

A gasoline mini-mart orders 25 copies of a monthly magazine. Depending on the cover story, demand for the magazine varies between 10 and 30 copies each month. The mini-mart purchases the magazines for $1.50 and sells them for $4.00. Any magazines left over at the end of the month are donated to hospitals and other health care facilities. Use the Minimart spreadsheet to model this situation. Identify the best order quantity using a simulation with 100 trials.

To generate the random demand, what is the formula to use?

= ( + ()*( - ), ) or =RANDBETWEEN(10, 30)

Answer 1

Although the Excel random generator passes all standard tests of randomness, it does not generate true random numbers. But don't write it off immediately :) Pseudo-random numbers produced by the Excel random functions are fine for many purposes.

Since the Excel RAND function has no arguments, you simply enter =RAND() in a cell and then copy the formula into as many cells as you want: