Essentials Of Business Analytics
Essentials Of Business Analytics
1st Edition
ISBN: 9781285187273
Author: Camm, Jeff.
Publisher: Cengage Learning,
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Chapter 10, Problem 6P

Heller Manufacturing has two production facilities that manufacture baseball gloves. Production costs at the two facilities differ because of varying labor rates, local property taxes, type of equipment, capacity, and so on. The Dayton plant has weekly costs that can be expressed as a function of the number of gloves produced:

T C D ( X ) = X 2 X + 5 ,

where X is the weekly production volume in thousands of units, and TCD(X) is the cost in thousands of dollars. The Hamilton plant’s weekly production costs are given by:

T C H ( Y ) = Y 2 + 2 Y + 3 ,

where Y is the weekly production volume in thousands of units, and TCH(Y) is the cost in thousands of dollars. Heller Manufacturing would like to produce 8,000 gloves per week at the lowest possible cost.

  1. a. Formulate a mathematical model that can be used to determine the optimal number of gloves to produce each week at each facility.
  2. b. Solve the optimization model to determine the optimal number of gloves to produce at each facility.
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30. An individual who has automobile insurance from a certain company is randomly selected. Let Y be the num- ber of moving violations for which the individual was cited during the last 3 years. The pmf of Y isy      | 1       2      4       8      16p(y) | .05   .10   .35   .40   .10 a.Compute E(Y).b. Suppose an individual with Y violations incurs a surcharge of $100Y^2. Calculate the expected amount of the surcharge.
24. An insurance company offers its policyholders a num- ber of different premium payment options. For a ran- domly selected policyholder, let X = the number of months between successive payments. The cdf of X is as follows: F(x)=0.00  :  x < 10.30  :  1≤x<30.40  :  3≤ x < 40.45  :  4≤ x <60.60  :  6≤ x < 121.00  :  12≤ x a. What is the pmf of X?b. Using just the cdf, compute P(3≤ X ≤6) and P(4≤ X).
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