Concept explainers
a)
To create: A one-way SolverTable for the steel available.
Introduction: The variation between the present value of the
b)
To create: A one-way SolverTable for the labor hours available.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
c)
To create: A one-way SolverTable for the unit profit contribution of large minivans.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
d)
To create: A one-way SolverTable for the minimum production level of large minivans.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
e)
To create: A one-way SolverTable for the minimum production level of compact cars.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
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Chapter 6 Solutions
Practical Management Science
- Digital Imaging has hired your Analytics Consulting Firm (SJU Analytics) to help determine how many units of each printer they should produce to maximize profit. Construct a Simple Linear Programing Analysis using Excel SOLVER Prepare a presentation to DI’s president presenting your findings and recommendations. Digital Imaging’s Leadership team has providing the following information: Digital Imaging (DI) produces color printers for both the professional and consumer markets. The DI consumer division recently introduced two new color printers. The DI-910 model can produce a borderless color print in approximately 37 seconds. The more sophisticated and faster DI-950 can even produce a borderless color print. Financial projections show profit contributions of $42 for each DI-910 and $87 for each DI-950. The printers are assembled, tested, and packaged at DI’s plant located in New Bern, North Carolina. This plant is highly automated and uses two manufacturing lines to produce the…arrow_forwardFedori Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Machinery Division has asked the Parts Division to provide it with 4,000 special parts each year. The special parts would require P23.00 per unit in variable production costs. The Machinery Division has a bid from an outside supplier for the special parts at P37.00 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the YR24 that it presently is producing. The YR24 sells for P40.00 per unit, and requires P28.00 per unit in variable production costs. Packaging and shipping costs of the YR24 are P3.00 per unit. Packaging and shipping costs for the new special part would be only P1.50 per unit. The Parts Division is now producing and selling 15,000 units of the YR24 each year. Production and sales of the YR24 would drop by 20% if the new special part is produced for…arrow_forwardMaterials Management $12.00 per purchase order Chemical Processing $7.50 per metric ton Molding $24.00 per direct labor hour Packaging $0.10 per unit Engineering designs show that the order will require direct materials that cost $540; direct labor cost will be $90. The order will require four purchas orders to be placed, use two metric tons of chemical base, and need eight direct labor hours. The size of the order is to produce 3,000 units of product. How to calculate the total production of the order?arrow_forward
- Two machines A and B produce items at the rate of 50 units per hour and 40 units per hour respectively. Under certain production plans, the total number of items needed is at least 1000 items, the total number of hours available for running the machines is atmost 24 hours. If the hourly cost is P300 for machine A and P250 for machine B, how many hours should each machine be used in order to minimize the cost? What is the minimum cost? Use either graphical method or simplex methodarrow_forwardAndy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is considering mass-producing the dolls to sell in stores. He estimates that the initial investment for plant and equipment will be $25,000, whereas labor, material, packaging, and shipping will be about $10 per doll. If the dolls are sold for $30 each, what sales volume is necessary for Andy to break even?arrow_forwardRadiant wants to hire Cargo planes for transporting their goods. They contacted VIP Transportation Company to hire Cargo planes. VIP informed that they can provide two types of Cargo Planes. In addition, they provided the following cost related information about the two types Cargo planes- WT88 and BH54: Personnel Cost Fuel Cost Maintenance Cost WT88 2000 1000 2000 BH54 2500 1500 1000 Radiant has $200,000 to spend in personnel cost, $160,000 in fuel cost, and $80,000 in maintenance cost. Moreover, they have to hire at least two of each type of planes. If WT88 can carry 55 tons of goods and BH54 can carry 85 tons of goods, then find out the following using Linear Programming: What is the maximum amount Radiant can carry given their budget constraint? Can you solve using solver ? (I did this but I got a wrong answer) Data Personnel Cost Fuel Cost Maintenance Cost Tons WT88 2000 1000 2000 55…arrow_forward
- Juliette loves to eat ice cream and spends a fortune each week buying it. In an effort to save money, she is considering making her own ice cream at home. The cost of an ice cream maker is $150 and the cost of ingredients is $6 for each 1.5 L batch. The cost of the same 1.5 L is $10 at the store. If she eats three litres of ice cream per month, will she save money by making her favourite treat at home? Assume the ice cream maker has a one-year warrant and breaks immediatelv after.arrow_forwardDana’s Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette $ 2.00 Sales price per rosette $ 6.00 Total fixed costs per month $ 6000.00 Required: 1. Suppose Dana’s would like to generate a profit of $1,120. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana’s sells 2,140 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana’s degree of operating leverage if it sells 2,140 rosettes. 4a. Using the degree of operating leverage, calculate the change in Dana’s profit if unit sales drop to 1,819 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit.arrow_forwardJuliette loves to eat ice cream and spends a fortune each week buying it. In an effort to save money, she is considering making her own ice cream at home. The cost of an ice cream maker is $155 and the cost of ingredients is $4 for each 1.5 L batch. The cost of the same 1.5 L is $12 at the store. If she eats three litres of ice cream per month, will she save money by making her favourite treat at home? Assume the ice cream maker has a one-year warranty and breaks immediately after.Cost of making the ice creamCost of buying the ice creamBest optionarrow_forward
- A machine shop has an order for 12 000 pcs of a machine part that requires anti-corrosive properties. Chromium steel alloy that cost Php. 95.00/kg or Nickel steel alloy that cost Php. 65.00/kg may be used. The weight per piece, production rate per day and tool bit replacement cost for Cr-alloy are: 0.25 kg, 75 pcs and Php. 1 600.00 for every 400 pcs produced. The respective date for Ni-alloy are 0.3 kg, 50 pcs and Php. 1 800.00 for every 300 pcs produced. If the charge for the labor and other operating cost is Php. 450.00/day, with all other expenses being the same, determine which material should be used.arrow_forwardA9)arrow_forwardA company has limited machine hours available per week, in result the company is able to produce only 3 of 4 products. The company needs to increase the number of hours worked using the existing machinery by working overtime. Such overtime would be paid at a premium of 50% above normal labour rates, and variable overhead costs would be expected to increase in proportion to labour costs. Critically discuss any expected increase in contribution and any issues (in particular in regard to overtime working) that could arise and would need to be resolved. What would be advantages and disadvantages of that and how this will affect the quanitity and the quality of the production and the whole process.arrow_forward
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