Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $16,000/day to operate, and it yields 50 oz of gold and 3000 oz of silver each of x day. The Horseshoe Mine costs $18,000/day to operate, and it yields 75 oz of gold and 1000 oz of silver each of y day. Company management has set a target of at least 650 oz of gold and 18,000 oz of silver. How many days should each mine be operated so that the target can be met at a minimum cost? (x, y) = What is the minimum cost?
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Perth Mining Company operates two mines for the purpose of extracting gold and silver. The Saddle Mine costs $16,000/day to operate, and it yields 50 oz of gold and 3000 oz of silver each of x day. The Horseshoe Mine costs $18,000/day to operate, and it yields 75 oz of gold and 1000 oz of silver each of y day. Company management has set a target of at least 650 oz of gold and 18,000 oz of silver. How many days should each mine be operated so that the target can be met at a minimum cost?
(x, y) | = |
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What is the minimum cost?
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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.Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
- At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.It costs a pharmaceutical company 75,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds. The drug sells for 125 per pound and leftover amounts of the drug can be sold for 30 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known.Byron Bay Cookie Company operates two bakehouses, one on the Gold Coast and the other in Byron Bay. There has been a reduction in demand for its products and it is no longer viable to operate both bakehouses. Management needs to decide which of the two it will discontinue to operate in the coming year. A preliminary investigation shows that the Gold Coast bakehouse is able to produce products at a faster rate than the Byron Bay bakehouse. However, this is because of an inefficient heating process. Transport costs are cheaper at the Gold Coast plant, as it is located closer to major suppliers. The following information relates to the two bakehouses for the past year: Gold Coast Byron Bay Average Direct Material cost per kilogram of cookies $3.50 $3.15 Other variable operating costs per kilogram of cookies $1.50 $0.75 Fixed cost of the bakehouse per annum $75 000 $55 000 Net cost of closing the plant $ 100 000 $80 000 Transport costs…
- You have two design options for your new line of high-resolution monitors for Computer-Aided Design (CAD)workstations. The production run is for 110,000 units. Design option A has a .90 probability of yielding 65good monitors per 100 and a .10 probability of yielding 70good monitors per 100. This design will cost $1,000,000. Design option B has a .80 probability of yielding 65good units per 100 and a .20 probability of yielding 60good units per 100. This design will cost $1,350,000. Good or bad, each monitor will cost $75. Each good monitor will sell for $150. Bad monitors are destroyed and have no salvage value. We ignore any disposal costs in this problem. Demonstrate how decision trees can be used in order to choose the design option based on the above situation. Calculate the expected monetary value (EMV) of each option and determine which option you will propose.A 3 year-old a computer-controlled fabric cutting machine, which had a $25,000 purchasing price, has a current market (trade-in) value of $10,000 and expected O&M costs of $4,000, increasing by 1,000 per year. The machine is required to have an immediate repair that costs $2,000. The estimated market values are expected to decline by 20% annually (going forward). The machine can be used for another 7 years at most. The new machine has a $40,000 purchasing price. The new machine's O&M cost is estimated to be $4,000 for the first year, decreasing at an annual rate of $100 thereafter. The firm's MARR is 10%. Assume a unique minimum AEC(10%) for both machines (both the current and replacement machine). Using the information above, determine the economic service life along with the optimum annual equivalent cost of the defender (This is an infinite Horizon decision problem). a) n=4 and AEC=Between $8,400 and $8,800 b) n=4 and AEC=Between $8,000 and $8,400 c) n=5 and AEC=Between $8,400 and…The university has an ongoing community project in which it uses a machine in its mechanical engineering lab to provide an investment income for the university. The machine can produce 100 widgets per hour. The lab operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the lab expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the lab expects to achieve an efficiency level for the widgets of 85%. What is the expected weekly output of widgets for this lab
- Jefferson Company’s demand for its only product exceeds its manufacturing capacity. The company provided the following information for the machine whose limited capacity is prohibiting the company from producing and selling additional units. Actual run time this week 6,106 minutes Machine time available per week 8,600 minutes Actual run rate this week 4.32 units per minute Ideal run rate 6.00 units per minute Defect-free output this week 11,315 units Total output this week (including defects) 15,500 units 1. Compute the utilization rate.2. Compute the efficiency rate. 3. Compute the quality rate. 4. Compute the overall equipment effectiveness (OEE).As part of their application for a loan to buy Lakeside Farm, a property they hope to develop as a bed-and-breakfast operation, the prospective owners have projected: Monthly fixed cost (loan payment, taxes, insurance, maintenance) $6000 Variable cost per occupied room per night $ 20 Revenue per occupied room per night $ 75 Write the expression for total cost per month. Assume 30 days per month. Write the expression for total revenue per month. How many rooms they need to sell per night in order to break even? Suppose 5 rooms can be sold per night, how much they should charge per night in order to breakeven?A fast-food restaurant has a drive-thru window and during peak lunch times can handle a maximum of 60 cars per hour with one person taking orders, assembling them, and acting as cashier. The average sale per order is $9.50. A proposal has been made to add two workers and divide the tasks among the three. One will take orders, the second will assemble them, and the third will act as a cashier. With this system, it is estimated that 85 cars per hour can be serviced.
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