Assume the demand for a company's drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the companybuilds a plant that can produce x units of Wozac per year, it will cost $16x. Each unit of Wozac is sold for $3. Each unit of Wozac produced incurs avariable production cost of $0.20. It costs $0.40 per year to operate a unit of capacity.a. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years. Consider a capacity rangefrom 40,000 to 80,000, at 5,000 unit increments.80,000b. Determine how large a Wozac plant the company should build to maximize its NPV over the next 10 years. Consider a capacity range from 40,000to 80,000, at 5,000 unit increments, and assume a 10% discount rate.40,000

The difference between the present value (PV) of a prospective sequence of cash inflows versus…

Answered: Assume the demand for a company's drug…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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See how sensitive the results in Example 11.2 are to the following changes. For each part, make the change indicated, run the simulation, and comment on any differences between your outputs and the outputs in the example. a. The cost of a new camera is increased to $500. b. The warranty period is decreased to one year. c. The terms of the warranty are changed. If the cam- era fails within one year, the customer gets a new camera for free. However, if the camera fails between 1 year and 1.5 years, the customer pays a pro rata share of the new camera, increasing linearly from 0 to full price. For example, if it fails at 1.2 years, which is 40% of the way from 1 to 1.5, the customer pays 40% of the full price. d. The customer pays $50 up front for an extended warranty. This extends the warranty to three years. This extended warranty is just like the original, so that if the camera fails within three years, the customer gets a new camera for free.
What is an example of a learning objective for a lesson on Integrating Writing in Math in a first-grade classroom? The learning objective should include the following required components: behavior, condition, and measurable criterion that aligns with both of the below standards. Math Standard Solve real-world problems involving addition and subtraction within 20 in situations of adding to, taking from, putting together, taking apart, and comparing with unknowns in all parts of the addition or subtraction problem (e.g., by using objects, drawings, and equations with a symbol for the unknown number to represent the problem). Writing Standard Produce (when writing or speaking) a topic sentence or main idea, provide some facts or details about the topic, and provide a concluding statement.
A piece of industrial machinery costs $48,000 to replace and has essentially no salvagevalue. Over the first five years of operation, maintenance costs amounted to $8,000. Ifthe maintenance cost rate is a linear function of time, what is the optimal age at whichto replace the machinery?
D3)
Large-scale integrated (LSI) circuit chips are made in one department of an electronics firm. These chips are incorporated into analog devices that are then encased in epoxy. The yield is not particularly good for LSI manufacture, so the AQL specified by that department is 0.15 while the LTPD acceptable by the assembly department is 0.40. Assume the company is willing to accept a consumer's risk of 10 percent and a producer's risk of 5 percent. Find the sample size. Use Exhibit 10.16. Note: if the exact value of the computed LTPD ÷ AOQ ratio does not appear in Exhibit 10.16, use the next higher ratio. Note: Round up your answer to the next whole number. How would you tell someone to do the test?
The army is attempting to determine the optimal replacement age for a piece of field equipment. The equipment costs $280,000 to replace. The manufacturer will supply a rebate toward the next purchase that declines at a rate of 20 percent per year. Maintenance costs for the first year are estimated to be $1,000, and they increase roughly at the rate of 18 percent per year. Estimate the number of years that the army should hold the equipment before making a replacement.(Production and Operation Analysis by Steven Nahmias, 7th edition, pg.774 Problem # 24)
A company owns a 5-year-old turret lathe that has a book value of $23,000. The present market value for the lathe is $18,000. The expected decline in market value is $1,700/year to a minimum market value of $4,080; maintenance plus operating costs for the lathe equal $4,470/year.A new turret lathe can be purchased for $46,000 and will have an expected life of 8 years. The market value for the turret lathe is expected to equal $46,000(0.70)k at the end of year k. Annual maintenance and operating cost is expected to equal $1,900. Based on a 12% MARR, should the old lathe be replaced now? Use an equivalent uniform annual cost comparison, a planning horizon of 7 years, and the cash flow approach.EUAC for keeping old turret lathe: $EUAC for replacing turret lathe: $
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A design engineer is considering the number of levels of redundancy to buildinto a particular circuit. The circuit will be part of a sensitive piece of equipmentwith cost estimated at $500 per failure. Each additional level of redundancy costs$100. If each component fails at random at a rate of one failure every five years,what level of redundancy most closely equates the cost of the design with the expected failure cost of the equipment over its 10-year life cycle?
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