A simulation consultant conducts an empirical study of a small family restaurant over the course of a week and records the daily net profit information shown in the "Empirical Observation" columns below. A simulation study of the restaurant's operation using 9 replications yields the estimated net profit values shown in the "Simulation Results" columns below.
Empirical Observation Simulation Results
Day Net Profit Replication Net Profit
Thursday $ 455.33 1 $ 547.77
Friday $ 457.99 2 $ 455.95
Saturday $ 436.21 3 $ 556.95
Sunday $ 549.98 4 $ 453.10
Monday $ 394.30 5 $ 502.15
Tuesday $ 410.89 6 $ 573.63
Wednesday closed 7 $ 468.08
8 $ 528.07
9 $ 497.92
Compute the following metrics:
a. Point estimate and an approximate 90% confidence interval for the observed Net Profit vs the expected Net Profit (calculated using simulation)
b. Compute the percentage error of the Net Profit point estimate for the simulation results determined in part a) above.
c. Approximately how many more replications would be needed for the simulation in order to obtain a point estimate with 5% relative error and a 95% confidence level?