Michael runs a kitchen that provides food for various canteens throughout a large organization. A particular salad is sold to the canteen for $10 and costs $8 to prepare. Therefore, the contribution per salad is $2. The kitchen must prepare the salads in batches of 10. The manager has asked you to decide how many salads the kitchen should supply for each day of the forthcoming year. using the payoff table and probabilities given. Daily Supply 40 salads 50 salads 60 salads 70 salads 40 salads 80 0 -80 -160 Daily 50 salads 80 100 20 -60 Demand 60 salads 80 100 120 40 70 salads 80 100 120 140 Prob(x) 0.1 0.2 0.4 0.5 What decision would you make to maximize the expeted monetary value?

Michael runs a kitchen that provides food for various canteens throughout a large organization. A particular salad is sold to the canteen for $10 and costs $8 to prepare. Therefore, the contribution per salad is $2. The kitchen must prepare the salads in batches of 10. The manager has asked you to decide how many salads the kitchen should supply for each day of the forthcoming year. using the payoff table and probabilities given. Daily Supply 40 salads 50 salads 60 salads 70 salads 40 salads 80 0 -80 -160 Daily 50 salads 80 100 20 -60 Demand 60 salads 80 100 120 40 70 salads 80 100 120 140 Prob(x) 0.1 0.2 0.4 0.5 What decision would you make to maximize the expeted monetary value?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
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		Daily Supply
		40 salads	50 salads	60 salads	70 salads
	40 salads	80	0	-80	-160
Daily	50 salads	80	100	20	-60
Demand	60 salads	80	100	120	40
	70 salads	80	100	120	140
	Prob(x)	0.1	0.2	0.4	0.5