Concept explainers
a)
To determine: The way Company R can maximize the profit.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
b)
To change: The model for the new constraint and identify the profit.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
c)
To use: The solver table to identify the change in profit due to the change in the price of Luxury Chanelle.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
d)
To use: The solver table to identify the change in profit due to the changes in lab time and the availability of the raw material.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
e)
To use: The solver table to identify the change in profit due to the change in time required to process luxury brute.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
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Chapter 4 Solutions
EBK PRACTICAL MANAGEMENT SCIENCE
- 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.arrow_forwardThomas has eight horses averaging 1,400 pounds. They are on 20 acres of orchard grass and clover. Each year, Thomas applied 30-30-30 units of fertilizer per acre using 46-0-0 urea at $408 per ton, 18-46-0 DAP at $496 per ton, and 0-0-60 muriate of potash at $506 per ton. He reseeded with 10 pounds per acre of orchard grass at $1.19 per pound and 2 pounds per acre of clover at $3.18 per pound. The horses are housed in a barn 34 feet wide with stalls 12 by 12 feet on each side and a 10-foot aisle down the center. He needs at least one fifth of the barn, not including the center, for hay and tack room. What did it cost to fertilize and reseed the pasture? How long must he barn be in even number of feet?arrow_forwardA retail store sold in the month of April 5,000 products that produced $45,000 in sales. In the month of May the company sold 6,000 products. The store workforce consists of four full-time workers who work 40-hour week. In April the store also had seven part-time workers at 10 hours per week, and in May the store had nine part-timers at 15 hours per week (assume four weeks in each month). Using sales dollars as the measure of output (assume the price of the product was the same for both months), what is the percentage change in labor productivity from April to May? Answer: 2.arrow_forward
- 4) The making of rivet holes in structural steel members can be done by 2 methods. The first method consists of laying out the position of the holes in the members and using a drill press costing P100k. The machinist is paid P60 per hour and he can drill 80 holes per hour. The second method makes use of a multiple-punch machine costing P80k. The punch operator is paid P40 an hour and he can punch out 1 hole for 3 seconds. This method also requires an expense of P1.25 per hole to set the machine. (a) if all other costs are assumed equal, what is the total cost for each machine for 10k holes, assuming the total cost of each machine to be charged to these holes? (b) for how many holes will the costs be equal?arrow_forwardA bhaliyaarrow_forwardThree methods can be used for producing heat sensors for high-temperature furnaces. Method A will have a fixed cost of $140,000 per year and a production cost of $62 per part. Method B will have a fixed cost of $210,000 per year and a production cost of $28 per part. Method C will require the purchase of equipment costing $500,000. It will have a life of five years and a 25% of first cost salvage value. The production cost will be $53 per part. At an interest rate of 10% per year, determine the breakeven annual production rate between the two lowest cost methods.arrow_forward
- FRUIT COMPUTER COMPANY Fruit Computer Company manufactures memory chips in batches of ten chips. From past experience, Fruit knows that 80% of all batches contain 10% (1 out of 10) defective chips, and 20% of all batches contain 50% (5 out of 10) defective chips. If a good (that is, 10% defective) batch of chips is sent to the next stage of production, processing costs of $4000 are incurred, and if a bad batch (50% defective) is sent on to the next stage of production, processing costs of $16000 are incurred. Fruit also has the alternative of reworking a batch at a cost of $4000. A reworked batch is sure to be a good batch. Alternatively, for a cost of $400, Fruit can test one chip from each batch in an attempt to determine whether the batch is defective. QUESTIONS 1.Determine a strategy so Fruit can minimize the expected total cost per batch. 2.Compute the EVSI and EVPI.arrow_forwardMemanarrow_forwardAssuming your company is producing Apple and Samsung phone cases. It is required to process in the assembly and paint shops to make either phone case. It takes 1/60 of a day and 1/40 of a day to paint an Apple case and a Samsung case in the paint shop, respectively. It takes 1/50 of a day to assemble either type of case in the assembly shop. An Apple phone case and a Samsung phone case yield profits of $300 and $220, respectively, per case sold. What is a maximum-profit daily production plan for your company?arrow_forward
- A company owns a 5-year-old turret lathe that has a book value of $23,000. The present market value for the lathe is $18,000. The expected decline in market value is $1,700/year to a minimum market value of $4,080; maintenance plus operating costs for the lathe equal $4,470/year.A new turret lathe can be purchased for $46,000 and will have an expected life of 8 years. The market value for the turret lathe is expected to equal $46,000(0.70)k at the end of year k. Annual maintenance and operating cost is expected to equal $1,900. Based on a 12% MARR, should the old lathe be replaced now? Use an equivalent uniform annual cost comparison, a planning horizon of 7 years, and the cash flow approach.EUAC for keeping old turret lathe: $EUAC for replacing turret lathe: $arrow_forwardThe Decision Sciences Department is trying todetermine whether to rent a slow or a fast copier. Thedepartment believes that an employee’s time is worth$15 per hour. The slow copier rents for $4 per hour,and it takes an employee an average of 10 minutes tocomplete copying. The fast copier rents for $15 per hour,and it takes an employee an average of six minutes tocomplete copying. On average, four employees per hourneed to use the copying machine. (Assume the copyingtimes and interarrival times to the copying machineare exponentially distributed.) Which machine shouldthe department rent to minimize expected total cost perhour?arrow_forwardYou are asked to help your boss deciding who is considering whether to make or buy a part fora top most demanding product of the company.Your company can make the component for $40 per unit or buy it for $50 per unit from vendor.If the Company decides to make the component, it will require 4 hours of machine time tomake each part. The company has 2,000 hours of machine time available per month. Shouldthe company make or buy the component? How many max parts company can make?________________________________________________________________arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,