The company wants to come up with an optimal shipping strategy that will allow it tominimize its total shipping cost.Sensitivity ReportAdjustable CellsCell$B$9$C$9$D$9$B$10$C$10$D$10$B$11$C$11$D$11ConstraintsCell$E$9$E$10$E$11$B$12$C$12$D$12Final Reduced Objective Allowable AllowableCoefficientIncreaseDecreaseName Value CostX1250X20X30X450X5100X6200X70X8 400X90F1F2F3R1R2R301200FinalShadowName Value Price2503504003005002000103-20-234213234222311E+301E+301121E+3011E+30ConstraintAllowableR.H. Side Increase2503504003005002005001000001E+3012111E+3011E+303AllowableDecrease01E+30050100200Use the Sensitivity Report to answer the following questions:(A) Please formulate the linear programming model.(B) Will any of the retail outlets experience any shortages in meeting their demand re-quirements if we implement the optimal solution?(C) Will any of the factories have any remaining quantities of the product if we imple-ment the optimal solution?(D) What is the total minimal shipping cost?(E) Suppose that the shipping cost per unit for variable X₁ (i.e., route F1-R1) increases to$2.00. What impact will this have on the current optimal solution and the objectivefunction value?(F) Suppose that the shipping cost per unit for variable X6 (i.e., route F2-R3) increasesby $2.00 to $5.00. What impact will this have on the current optimal solution andthe objective function value?(G) Suppose that the factory constraints and the retail outlet constraints become "<".What would the optimal solution and the objective function coefficient be? (Hint:The answer to this question is not given in the Sensitivity Report.) E Modeling and Analysis1. A company can ship its product from any of its three factories, F1, F2, and F3, to anyof its retail outlets, R1, R2, and R3. The capacity, demand, and shipping cost informationis provided as follows:Demand and CapacityDemand (units)R1: 300R2: 500R3: 200Capacity (units)F1: 250F2: 350F3: 400Shipping Cost/unit ($)R1 R2 R3F1 1 3F2 3 4F322223

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
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.
Demand for stereo headphones and music players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for this year was as follows: MONTH DEMAND (UNITS) January 4,150 February 4,250 March 3,950 April 4,350 May 4,950 June 4,650 July 5,250 August 4,850 September 5,350 October 5,650 November 6,250 December 5,950 a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.8. (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. To be reasonably confident of meeting demand, Nina decides to use 3 standard errors of estimate for safety. How many additional units should be held to meet this…
The Ace Manufacturing Company has orders for three similar products. Orders Product (units) Min A s.t. B с 1 2 Three machines are available for the manufacturing operations. All three machines can produce all the products at the same production rate. However, due to varying defect percentages of each product on each machine, the unit costs of the products vary depending on the machine used. Machine capacities for the next week and the unit costs are shown below. Machine 3 A A B B c с 1 Product 2 3 Machine 2 Capacity 2,000 Machine 1 Capacity 600 1,300 Machine 3 Capacity Product A Orders Capacity (units) Product B Orders 1,700 1,600 1,000 1 $1.00 $1.30 $1.10 Use the transportation model to develop the minimum cost production schedule for the products and machines. (a) Show the linear programming formulation. (Let XA₁ be the number of units of product A produced by machine 1, X;; be the number of units of product i produced by machine j, etc.) Machine $1.20 $1.40 $1.00 2 $0.90 $1.20 $1.20…
Which of the following would be most appropriate basis for apportioning machinery insurance costs to cost centers within a factory? Select one: a. The flor area occupied by the machinery in each cost Centre b. Number of machine in each cost Centre c. The operating hours of each machinery in each cost center d. The value of machinery in each cost center
TUTORIAL DECISION ANALYSIS 1. e) 0 B) 2. Even though independent gasoline stations have been having a difficult time, Susan Solomon has been thinking about starting her own independent gasoline station. Susan's problem is to decide how large her station should be. The annual returns will depend on both the size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Susan developed the following table: Size of First Station Small Medium Large Extra Large Stock Market Bonds CDs Good Market (5) Probability a) b) 50,000 80,000 Decision Alternative. 100,000 300,000 Fair Market (S) 20,000 30,000 30,000 25,000 For example, if Susan constructs a small station and the market is good, she will realize a profit of $50,000. what is the criterion of realism decision? Use an a value of 0.8. Develop an opportunity loss table? What is the minimax regret decision? Mickey Lawson is considering investing some money that he…
13.2 A company manufactures component parts for machine tools in North America and ships them to Southeast Asia for assembly and sale in the local market. The components are shipped by sea, transit time averages 6 weeks, and the shipping costs $2700 per shipment. The company is considering moving the parts by air at an estimated cost of $7500; the shipment taking 2 days to get there. If inventory in transit for the shipment costs $125 per day, should they ship by air?
Data collected on the yearly demand for 50- pound bags of fertilizer at Wallace Garden Supply are shown in the following table. Estimate demand for vear 12 with a weighted moving average in which sales in the most recent year are given a weight of 2 and sales in the other two years are each given a weight of 1. Year Demand (Bags) 4 6. 3 4. 4. 10 6 8. 8. 8. 12 10 14 11 15 O A. 13.67 O B. 14.00 OC. 14.87 O D. 11.79 Click to select your answer. Us MacBook Air 888 * ES F2 F4 F6 F7 4) F9 F10 %23 2$ & * 4 6. 7 8 9. Q W R T Y F C V В alt command command option %#3
Use the following for the next 2 questions: A company forecasts that it will ship 120,000 boxes of product in June. The product has a monthly turnover of 3. The company plans to use its facility to ship 80,000 boxes and the balance of the 40,000 boxes will ship from a rented facility. Space may be rented for a charge of $7 per box per month with an in-and-out handling charge of $0.45 per box shipped. 1. What is the rented (fixed) storage cost for June? - $280,000 - $180,000 - $42,500 - $250,000 - $93,333 - $153,333 - $173,333 2. What is the rented variable cost for June? - $33,333 - $43,333 - $6,000 - $38,000 - $18,000 - $28,000 - $23,333
E-5 Boston Executive, Inc., produces executive limousines and currently manufactures the mini-bar inset at these costs: (refer the attached image) The company received an offer from Elite Mini-Bars to produce the insets for $2,100 per unit and supply 1,000 mini-bars for the coming year’s estimated production. If the company accepts this offer and shuts down production of this part of the business, production workers and supervisors will be reassigned to other areas. Assume that for the short-term decision-making process demonstrated in this problem, the company’s total labor costs (direct labor and supervisor salaries) will remain the same if the bar inserts are purchased. The specialized equipment cannot be used and has no market value. However, the space occupied by the mini-bar production can be used by a different production group that will lease it for $55,000 per year. Should the company make or buy the mini-bar insert?
Southern Sporting Goods Company makes basketballs and footballs. Each product is produced from two resources-rubber and leather. The resource requirements for each product and the total resources available are as follows: Product Resource Requirement per Unit Rubber (lb.) Basketball 4 Football 5 Total Resources available 500 lb. 800 ft.2 * Each basketball produced results in a profit of $12, and each football earns $16 in profit. b. Transform this model into standard form Leather (ft.2) 3 2 a. Formulate a linear programming model to determine the number of basketballs and footballs to produce in order to maximize profit.
EFE company manufactures and sells boats. The company's management accountant gathered the following data to prepare budgets for 2012; Direct Materials Requirements Material A 12 metres per boat Material B 14 square meter per boat Inventory data of Direct Materials are; Beginning Inventory Material A 5.000 meters Material B 2400 square meters Inventory data of Finished Goods are; Beginning Inventory Target Ending Inventory Вoats 1.000 units 3.000 units Moreover, unit purchase price of material A was $60 and unit purchase price of material B was $10. For the coming year 2021 it is expected that unit purchase price of material A will be $64 and unit purchase price of material B will not change. The company uses FIFO inventory method. Labor hours required to produce 1 boat is 3 hours and the company plans to pay S12 per hour. Company budgeted manufacturing overhead rate of $6 per labor hour. Finally, the company expects to sell 4000 boats in 2021 at an average unit selling price of $6000.…

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