Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Chapter 4, Problem 120P
Summary Introduction
To determine: The way Company C can maximize the weekly profit.
Linear programming:
It is a mathematical modeling procedure were 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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FRUIT COMPUTER COMPANY
Fruit Computer Company manufactures memory chips in batches of ten chips. From past experience, Fruit knows that 80% of all batches contain 10% (1 out of 10) defective chips, and 20% of all batches contain 50% (5 out of 10) defective chips. If a good (that is, 10% defective) batch of chips is sent to the next stage of production, processing costs of $4000 are incurred, and if a bad batch (50% defective) is sent on to the next stage of production, processing costs of $16000 are incurred. Fruit also has the alternative of reworking a batch at a cost of $4000. A reworked batch is sure to be a good batch. Alternatively, for a cost of $400, Fruit can test one chip from each batch in an attempt to determine whether the batch is defective.
QUESTIONS
1.Determine a strategy so Fruit can minimize the expected total cost per batch.
2.Compute the EVSI and EVPI.
A machine part to be fabricated may be made from alloy of either of two metals. There is an order for 10,000 units. Metal A costs 3 pesos per kg, while Metal B costs 9 pesos per kg. If Metal A is used, the material per unit weighs 110 grams; for metal B, 30 grams. When metal A is used, 50 units can be produced per hour; for metal B, 80 units per hour. Metal B fabrication requires the aid of a tool costing P1,000, which will be useless after the 10,000 units are finished. The machine operator's wage is P50 per hour. If all other costs are identical, determine which material will be more economical to finish the 10,000-unit order. How much is the total cost difference between the use of metal A and metal B?
A company has one machine which can be used to make product Alpha and product Beta.
Each unit of product Alpha requires 45 minutes of machine time, while
each unit of product Beta requires 37 minutes of machine time.
The machine can be used for 8 hours per day and 5 days per week.
Next week the company will produce 23 units of product Alpha.
After completing the production of Alpha, the company will produce product Beta.
How many units of product Beta can be produced next week?
Use at least 4 decimals.You must showm your calculation steps and brief explanation on your Excel spreadsheets.
Chapter 4 Solutions
Practical Management Science
Ch. 4.2 - Prob. 1PCh. 4.2 - Prob. 2PCh. 4.2 - Prob. 3PCh. 4.2 - Prob. 4PCh. 4.2 - Prob. 5PCh. 4.2 - Prob. 6PCh. 4.3 - Prob. 7PCh. 4.3 - Prob. 8PCh. 4.3 - Prob. 9PCh. 4.3 - Prob. 10P
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