Homework Help is Here – Start Your Trial Now!
Business
Operations Management
The expected monetary value using inside engineers to complete the design is $. (Enter your response as an integer.) The expected monetary value using an outside engineering firm to complete the design is $. (Enter your response as an integer.) The expected monetary value of conducting a joint design is $ What is the best decision based on an expected monetary value criterion? O External engineering firm O Joint design (Enter your response as an integer.) Internal engineers

The expected monetary value using inside engineers to complete the design is $. (Enter your response as an integer.) The expected monetary value using an outside engineering firm to complete the design is $. (Enter your response as an integer.) The expected monetary value of conducting a joint design is $ What is the best decision based on an expected monetary value criterion? O External engineering firm O Joint design (Enter your response as an integer.) Internal engineers

Practical Management Science
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...
See similar textbooks
icon
Related questions
Question

14

Martin's Supply company has given an opportunity to become a permanent supplier by a major automobile company in Chicago. Currently the supply company's staffs are overloaded with design and development work due to strong demand in alternative fuel based automobiles. A new product is due in 8 months. The penalty for completing the design late is $14,000 per month, since any delay will cause the automobile company to open later and cost the automobile company significant revenue. If Martin uses its inside engineers to complete the design, it will have to pay them overtime for all work. Martin has estimated that it will cost $12,000 per month (wages and overhead), including late months, to have company engineers complete the design. Martin is also considering having an outside engineering firm do the design. A bid of $92,000 has been received for the completed design. Yet another option for completing the design is to conduct a joint design by having a third engineering company complete all electromechanical components of the design at a cost of $52,000. Martin would then complete the rest of the design and control systems at an estimated cost of $28,000. Martin has estimated the following probabilities of completing the project within various time frames when using each of the three options. Those estimates are shown in the following table: following tabl Probability of Completing the Design One month late Two months late Option Internal Engineers External Engineers Joint Design On Time 0.3 0.1 0.1 0.4 0.5 0.3 O Joint design 0.3 25 O External engineering firm 0.2 The expected monetary value using inside engineers to complete the design is $ integer.) 0.5 Three months late 0.2 0.1 The expected monetary value using an outside engineering firm to complete the design is $ an integer.) The expected monetary value of conducting a joint design is $. (Enter your response as an integer.) What is the best decision based on an expected monetary value criterion? (Enter your response as an (Enter your response as O Internal engineers
Transcribed Image Text:Martin's Supply company has given an opportunity to become a permanent supplier by a major automobile company in Chicago. Currently the supply company's staffs are overloaded with design and development work due to strong demand in alternative fuel based automobiles. A new product is due in 8 months. The penalty for completing the design late is $14,000 per month, since any delay will cause the automobile company to open later and cost the automobile company significant revenue. If Martin uses its inside engineers to complete the design, it will have to pay them overtime for all work. Martin has estimated that it will cost $12,000 per month (wages and overhead), including late months, to have company engineers complete the design. Martin is also considering having an outside engineering firm do the design. A bid of $92,000 has been received for the completed design. Yet another option for completing the design is to conduct a joint design by having a third engineering company complete all electromechanical components of the design at a cost of $52,000. Martin would then complete the rest of the design and control systems at an estimated cost of $28,000. Martin has estimated the following probabilities of completing the project within various time frames when using each of the three options. Those estimates are shown in the following table: following tabl Probability of Completing the Design One month late Two months late Option Internal Engineers External Engineers Joint Design On Time 0.3 0.1 0.1 0.4 0.5 0.3 O Joint design 0.3 25 O External engineering firm 0.2 The expected monetary value using inside engineers to complete the design is $ integer.) 0.5 Three months late 0.2 0.1 The expected monetary value using an outside engineering firm to complete the design is $ an integer.) The expected monetary value of conducting a joint design is $. (Enter your response as an integer.) What is the best decision based on an expected monetary value criterion? (Enter your response as an (Enter your response as O Internal engineers
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS