Operations Management
11th Edition
ISBN: 9780132921145
Author: Jay Heizer
Publisher: PEARSON
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Question
Chapter 5, Problem 19P
Summary Introduction
To prepare: Modified decision tree and find the payoff and branch with the greatest EMV.
Introduction: Expected monetary value (EMV) is a calculation system for expected returns for the certain decision made by a company.
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Students have asked these similar questions
Table Q4. Average monthly discharge of Athi River City, m³/s
Year
Jan Feb
Mar
1987
2.92
5.10 1.95
Apr
4.42
May Jun
3.31 2.24
Jul
Aug
1.05
Sep
0.74 1.02
Oct Nov Dec
1.08 3.09 7.62
2
1988
24.3
11.5
17.2 12.6
7.28
7.53
3.03 10.2
10.9 17.6 16.7
3
1989
15.3
13.3
14.2
36.3 13.5 3.62
1.93
1.83
1.93
4
1990
11.5
4.81
8.61
27.0
4.19 2.07
1.15
2.04
5
1991
11.1
7.90
41.1
6.77
8.27
4.76
2.78
2.10
1.70 1.44 4.02
3.29 5.98 12.7
3.12 2.97 4.45
4.45 3.03
12.2 7.22
1.98
6
1992
2.92
5.10 28.7
0.91
0.67 1.33 2.38 2.69 3.03
7
1993
7.14
10.7 9.63
21.1 10.2
5.13
3.03
10.9
3.12
2.61 3.00 3.82
14.0 14.2
8
1994
4.96
7.36
47.4 29.4
2.29
1.70
1.56
1.56
2.04 2.35
9
1995
2.89
9.57 17.7
16.4 6.83
3.74
1.60
1.13
1.13 1.42
1.98 2.12
24.7
10
1996
1.78
1.95 7.25
6.26
8.92
3.57
1.98 1.95
3.09
3.94 12.7
11
1997 13.8
6.91 12.9
11.3
3.74
1.98
1.33
1.16 0.85
2.63
6.49
5.52
12
1998 4.56
8.47 59.8
9.80 6.06 5.32
2.14
1.98
2.17
3.40 8.44
11.5
13
1999 13.8
29.6 38.8
13.5
37.2
22.8
6.94
3.94
2.92
2.89
6.74
3.09
14
2000 2.51
13.1…
Question 4
b) Company ABC wishes to evaluate whether to produce a component
internally or purchase from a vendor. The firm has the following options:
Internal Production
Process 1
Process 2
Purchase from Vendor
Vendor 1
Vendor 2
Vendor 3
Variable cost of $17 per unit; annual
fixed cost of $200,000
Variable cost of $14 per unit; annual
fixed cost of $240,000
Offers a price of $20 per unit for any
volume up to 30,000 units
Offers a price of $22 per unit for 1,000
units or less, and $18 per unit for
large quantities
Offers a price of $21 per unit for the
first 1,000 units and $19 per unit for
additional units
If the annual demand is 10,000 units, which alternative would be best from
a cost standpoint? For 20,000 units, which alternative would be best?
Question and Observe:
At what level of demand (number of units) per year would these two alternatives be equal?
Graphically represent these two alternatives and their tradeoff point.
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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