Concept explainers
a)
To determine: The way Company S can maximize its profit.
Linear programming:
It is a mathematical modeling procedure where 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 use: A solver table to identify how the changes in the cost per bag of oranges change the optimal solution.
Linear programming:
It is a mathematical modeling procedure where 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: A solver table to identify how the changes in the amount of grade 6 oranges available change the optimal solution.
Linear programming:
It is a mathematical modeling procedure where 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: A solver table to identify how the changes in the required average quality required for juice and the average quality required for bags changes the optimal solution.
Linear programming:
It is a mathematical modeling procedure where 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
Practical Management Science
- At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.arrow_forwardThe Woodruff Corporation purchased a piece of equipment three years ago for $211,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $89,000. A new piece of equipment can be purchased for $321,500. It also has an ADR of eight years. Assume the old and new equipment would provide the following operating gains (or losses) over the next six years. Old equ 26,250 14,750 9,500 6,000 5,500 -6,500 The firm has a 25 percent tax rate and a 9 New equipment 81,000 74,500 70,750 61,250 51,500 46,750 year 1 4 percent cost of capital. What is the net cost of the new equipment? Round your solution to two decimal places. What is the present value of incremental benefits? Round your solution to two decimal places. What is the NPV of this replacement decision? Round your solution to two decimal places.arrow_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
- Casting molds are produced by MYMOLD company. Each order has unique specifications, depending on customer needs. MYMOLD has received an order of two molds from a customer. The agreed selling price of the molds is 5000TL per mold. According to the agreement, for a defective mold the customer will pay 1000TL instead of the standard price. The customer will not buy any more than two molds and there is a 2000 TL fine for not meeting the demand with two non-defective molds. The excess molds can be salvaged for 500 TL per piece. The cost of production per mold is 2000TL and the probability of producing a non-defective mold is 0.8. Assume that MYMOLD decided to produce two molds, and the first production has been succesfull (a non-defective mold is produced). What is the expected profit given the result of the first production?arrow_forwardThere are approximately 15,000 households in the Tondo, Manila.Over the 6-month lockdown, a number of households purchased one (1) unit of air conditioner. The breakdown of the brands purchased is as follows: 1. Super Lamig - 4,688 households2. Frozen to Death - 1,456 households3. Feeling Airy - 2,355 households4. Typhoon - 3,899 households Based on the above data, what is the market penetration of air conditioning units in Tondo, Manila during the 6-month lockdown period?arrow_forwardAn airline company has been contracting a maintenance company to do overhauls for its planes at a cost of $51275 per plane per quarter. The airline company estimates that by building a $1461838 maintenance facility with a life of 5 years and a residual market value of $770217 at the end of its life, they could handle their own overhaul at a cost of only $42020 per plane per quarter. What is the minimum number of planes they must operate to make it just profitable to build this facility? (=2% per quarter). • 25 O 31 Clear my choicearrow_forward
- Richard has been a highly regarded employee of the Brier Corporation for almost 20 years. Her loyalty to the company is reflected in her dedication to her job as general accounting clerk from which she has not taken a vacation in almost 12 years. Because of her dedication and long tenure, she has acquired many related responsibilities, which has allowed the Brier Corp to reduce its work force through attrition, control salary expenses and become more efficient and competitive. The following describes Richard’s responsibilities. Richard receives copies of credit sales orders from the sales department. From these documents she accesses the AR subsidiary ledger from her office computer and records the AR. She then records the sale in the sales journal and posts the transactions to the general ledger accounts. Cash receipts in payment of customer AR come directly to her office. She records the cash receipts in the GL cash and AR accounts and updates the AR subsidiary ledger. She then…arrow_forwardPlease apply Kohlberg's model to the following scenario. Analyze what you would do, then determine where that places you in the Kohlberg's model. You are confronted with the following situation in the work place: It has become known to you, by the actions of the leaders of your department, that in order to gain a competitive advantage over your rivals in the industry, management has created a fake entity to acquire a product that they could not purchase from the competitor otherwise. It is the intent of management to dissect the product in order to make your product more appealing thereby enticing consumers to prefer your product. You work in the accounting software industry and you are an Accountant. What would you do?arrow_forwardThe Marketing Manager of Dotcom Limited has conducted a market research on the price-demand relationship for its consumer durable Product-V which has been recently launched. The price-demand pattern will be as follows: Price per unit (Rs.) 16.650 16.050 14.400 13.050 Product-V is manufactured in batches of 1.000 units. The production manager of Dotcom Limited has also researched and studies the pattern and believes that 50% of the variable manufacturing cost would have a learning effect. This learning curve effect will continue up to 4.000 units of production at constant rate But after 4.000 units of production unit variable manufacturing cost would be equal to the unit cost at the 4 batch. The manufacturing unit cost of the first batch will be Rs. 6.600 of which only 50% is subjected to learning and experience curve effect. The average unit variable of all 4 batches will be Rs 6.180 The price and maximum contribution at which Dotcom Limited should sell Product-V is: Rs.14,400, Rs.…arrow_forward
- No Pain Corp Omar Amman, the CEO of No Pain Corp (NPC), is under stress. They produce transcutaneus electrical nerve simulation units (TENS) for pain control. Amman faces a new opportunity and is not sure how to go about it. Recently, the the Department of Health of Canada has approved low current TENS devices to be sold directly to consumers without a doctor’s note. This will come into effect in three months. In the past, one needed a doctor’s note and could rent the device from some companies. These TENS machines, as they are called in Canada, are popular, since the older population has found them to be effective in pain control with almost no side effects. Amman can sell the device via drug-stores and pharmacies as well as on Amazon. But, Amman is not sure. Amman used to work as a supply chain manager for a power-tool company. Back then, it was a huge logistical “pain,” no pun intended, to work with large retailers and to attend to their fulfilment needs. Those retailers used to…arrow_forwardAt an Oxford grocery store, the manager Jenny Produce buys lettuce each day to ensure really fresh produce. In her focus on quality, each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week Jenny can buy fresh lettuce for $10.00 a box. The lettuce is sold for $22.00 a box and the dealer that sells old lettuce is willing to pay $2.00 a box. Past history says that tomorrow's demand for lettuce averages 270 boxes with a standard deviation of 44 boxes. How many boxes of lettuce should Jenny purchase tomorrow? (Use Excel's NORMSINV() function to find the Z-score. Round intermediate calculations to four decimal places. Round your answer to the nearest whole number.) I have asked this 3 times and nobody has got it right.arrow_forwardA scientist works in a lab with four summer interns and, as it is the end of the summer, he anticipates the head of the lab will ask him which of them he wants to retain. In terms of quality, the scientist and the head of the lab agree that intern A is better than intern B who is better than intern C who is better than intern D. The scientist would like to keep as many interns as possible and, given any number, the highest-quality ones. However, due to funding restrictions, the head of the lab wants to limit the number of interns that are retained. The head of the lab initially tells the scientist to select two interns to retain. After the scientist chooses two interns, the head of the lab decides whether to allow the scientist to retain a third intern. Thus, the sequence of moves is: 1) the scientist chooses two interns (both of whom are then retained); 2) the head of the lab decides either to allow the scientist to choose a third or not; and possibly 3) if the head of the lab chose…arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,