The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce the complexity of this problem, ignore the hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week’s work. HTM has received an order to build 1,000 oak desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk 2 weeks after the desks are delivered. Should HTM take this order? Week Units Week Units Week Units 1 2 3 4 5 2 4 8 12 4 6 7 8 9 10 24 64 128 128 128 11 12 13 14 15 Total 88 100 100 100 100 1000

The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce the complexity of this problem, ignore the hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week’s work. HTM has received an order to build 1,000 oak desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk 2 weeks after the desks are delivered. Should HTM take this order? Week Units Week Units Week Units 1 2 3 4 5 2 4 8 12 4 6 7 8 9 10 24 64 128 128 128 11 12 13 14 15 Total 88 100 100 100 100 1000

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter12: Queueing Models

Section: Chapter Questions

Problem 59P

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