Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Question
Chapter 5, Problem 17P
a)
Summary Introduction
To determine: The best decision when Company R is assumed to possess the semiconductor.
Introduction: Expected monetary value (EMV) is a calculation system for expected returns for the certain decision made by a company.
b)
Summary Introduction
To determine: The criteria used in decision making.
c)
Summary Introduction
To determine: The worst and the best outcomes to Company R because of the decision made.
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QUESTION #1
Mrs. Johnson, the owner of a small manufacturing business has patented a new device for
kitchen appliance. Before trying to commercialize the device and add it to her existing product
line, the she wants reasonable assurance of success. Variable costs are estimated at $8 per unit
produced and sold. Fixed costs are about $60,000 per year.
a. Forecasted sales for the first year are 15,000 units if the price is reduced to $20. With this
pricing strategy, what would be the product's total contribution to profits in the first year?
b. If the selling price is set at $30, how many units must be produced and sold to break even?
Use both algebraic and graphic approaches
QUESTION 3
A producer has 100 cows, and wants to evaluate the economic feasibility of artificial insemination against natural mating. After taking into consideration the cost of bulls (using 4%), the operational
costs, and the salvage value, the producer estimates that the cost of bulls per year is $3,170. On the other hand, the producer estimates that if using Al, the cost for frozen semen is $1,671/year
and the cost to synchronize cows (using lutalyse) is $286/year.
Based upon this information, estimate the maximum amount (i.e. $/hour) that the producer can pay for Al labor (before Al becomes more expensive than natural mating).
Assume that for the 100 cows, 98 hours of labor are required for Al. Also assume that the producer already has proper facilities and Al tanks.
Enter your answer in the "answer" box below. Do not enter units, just enter dollars and cents (round to the nearest hundreth). For instance, if your answer is ten dollars and twenty-five cents per
hour, just enter…
Question 1
The probability that equipment in a hospital lab will need recalibration is given in the table below. A service firm will provide maintenance and provide any necessary calibrations for $650 per month. Recalibration costs $500 per time.
Number of Recalibrations
0
1
2
3
4
Probability of Occurrence
.15
.25
.30
.20
.10
Determine which approach, recalibration as needed or the service contract, would cost less.
Question 2
Determine the optimum preventive maintenance frequency for each of the pieces of equipment below if breakdown time is normally distributed.
Equipment
Average Time (days) between Breakdowns
Standard Deviation
Preventive Maintenance Cost
Breakdown Cost
A201
20
2
$300
$2300
B400
30
3
$200
$3500
C850
40
4
$250
$4800
Hint:
Step 1:Compute the ratio of preventive cost to breakdown cost for each piece of equipment (round to a maximum of four decimals).
Step 2:
Find the z value corresponding to the ratio from Step 1 and use this value of z to compute…
Chapter 5 Solutions
Operations Management
Ch. 5.S - Prob. 1DQCh. 5.S - Prob. 2DQCh. 5.S - Prob. 3DQCh. 5.S - Prob. 4DQCh. 5.S - Prob. 5DQCh. 5.S - Prob. 6DQCh. 5.S - Prob. 7DQCh. 5.S - Prob. 1PCh. 5.S - Prob. 2PCh. 5.S - Prob. 3P
Ch. 5.S - Prob. 4PCh. 5.S - Prob. 5PCh. 5.S - Prob. 6PCh. 5.S - Prob. 7PCh. 5.S - Prob. 8PCh. 5.S - Prob. 9PCh. 5.S - Prob. 1.1VCCh. 5.S - Prob. 1.2VCCh. 5.S - Prob. 1.3VCCh. 5.S - Prob. 2.1VCCh. 5.S - Prob. 2.2VCCh. 5.S - Prob. 2.3VCCh. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - In what ways is product strategy linked to product...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Prob. 10DQCh. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Why are the direct interaction and surrogate...Ch. 5 - Prob. 18DQCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Question 5.3 Prepare a house of quality fora...Ch. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Select a service business that involves...Ch. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Residents of Mill River have fond memories of ice...Ch. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 1CSCh. 5 - Prob. 2CSCh. 5 - Prob. 3CSCh. 5 - Prob. 1VCCh. 5 - Prob. 2VCCh. 5 - Prob. 3VCCh. 5 - Prob. 4VC
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