322_practise final
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Economics
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Jan 9, 2024
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Formula Sheet
Gross Margin = Revenue – COGS Reorder point = Lead time × Average daily or weekly usage OEE = Availability × Performance × Quality Price variance = AQ (AP – SP) Quantity variance = SP (AQ – SQ) 1
Question 1 Part A Medical Lab Supplies distributes medical supplies and equipment throughout North America. Selected information related to a quick-developing X-ray film carried by the company is given below: Management is trying to determine the proper safety stock to carry on this inventory item and to determine the proper reorder point. Economic order quantity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 units Maximum weekly usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 units Lead time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 weeks Average weekly usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 units Required: a)
Assume that no safety stock is to be carried. What is the reorder point? (2 Marks)
b)
Assume that a full safety stock is to be carried. What is the size of the safety stock in units? What is the reorder point? (5 Marks)
2
Part B Amazon operates a customer call center in Vancouver, which it employs 2 work shifts of 30 employees each. The call center operates 7 days per week. Each work shift lasts 8 hours, and each employee gets paid breaks totaling 1 hour. Breaks are staggered so that the call center is available to customers for the full 8 hours per shift. During a recent week, the first shift had actual operating time of 1,200 hours. Calling records showed that
the actual time to complete a call averaged 5.3 minutes, but the expected time per call was 4.5 minutes. During this week, the first shift completed 11,000 calls, of which 1,100 were repeat calls from customers whose problems were not resolved during the first call. Repeat calls are counted as defective calls. Required: Compute the first shift’s overall equipment effectiveness. 3
Question 2 Slyman Manufacturing Inc. has developed the following standards for one of its products. The materials are not substitutable. Material 1
5 yards
$6/yard
$30
Material 2
6 pieces
$5/piece
$30
Direct labor
3 hours
$24/hour
$72
Total variable cost per unit
$132
4
The records for March showed the following actual results:
Purchased
10,000 yards for $58,000
Used
9,500 yards
Purchased
15,000 pieces for $78,750
Used
12,100 pieces
Direct labor
Units produced
Material 1
Material 2
5,900 hours for $147,500
2,000 units
Required:
a)
Calculate the material purchase price variance for material 1. (2 Marks)
b)
Calculate the material quantity variance for material 1. (2 Marks)
c)
Calculate the material purchase price variance for material 2. (2 Marks)
d)
Calculate the material quantity variance for material 2. (2 Marks)
e)
Calculate the labor rate variance. (2 Marks)
f)
Calculate the labor efficiency variance. (2 Marks)
g)
For each question above, indicate whether the variance is favorable or unfavorable. (3 Marks)
5
a.
58000-10000*6 = -2000 F
b.
6*(9500-5*2000) = -3000 F
c.
78750-5*15000 = 3750 U
d.
5*(12100-6*2000) = 500 U
e.
147500-24*5900 = 5900 U
f.
24*(5900-3*2000) = -2400 F
6
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Related Questions
Answer questions 5 to 7 using the following
information:
(M&M) sell one size of coffee latte. Medro &
Mariana put together the weekly breakeven
diagram for the coffee latte as shown below.
The coffee shop operates 6 days a week.
Medro was trying to figure out the equation
used to calculate total revenue (TR). Which
of the following is the correct total revenue
equation?
KD/wk
875
750
700
642.86
500
3D
285.71
400
500
600
Ol attes)
a. TR = 1.5Q
b. TR = 1.75Q
c. TR = 20
d. cannot be determined, not enough
information
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Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager would like you to determine a minimum-cost inventory plan for an upcoming mobile phone to be launched in the market. They have collected the following information:
• Annual demand: 700 phones • Phone cost: $1,793 each• Phone RRP: $1,949 each• Net weight: 169 g each
• Tare weight: 61 g each• Annual inventory holding cost: 30%• Cost per order to replenish inventory: $82• Annual in-transit holding cost: 10%• Freight rate (per kg): $8.10• Freight rate (per consignment): $301.50 (i.e. handling fee, dangerous good fee, anlithium battery fee)• Time to process order for freight: 1 days • Freight transit time: 4 days
Solve this problem using a non-linear programming (NLP) model and your model should generate only integer results for economic order quantity and the number of orders.
1. Economic order quantity for the phone in units and in kg
2. The total cost for purchasing the phones3. The total…
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Problem 1 d only
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Note:-
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Case
The power-take-off (PTO) connects an implement, such as a sprayer or mower, to a farm tractor and
provides the driving force for the implement. One of the hazards of farming is possible entanglement in
the PTO while the tractor is running. To prevent such accidents and the injuries that can result,
implement manufacturers have provided tractors with a PTO shield to cover the PTO shaft and a
specified pushpin to connect the PTO to the implement input driveline. Frequently during maintenance,
the farmer must remove the PTO shield. During reassembly and preparation for use, the farmer replaces
the shield only 88% of the time and uses the specified pushpin, rather than substituting an ordinary bolt,
97% of the time. For safe operation both the shield and the pushpin need to be in place.
Fill in the following event-
tree diagram with the probabilities of task success and failure (Task 1 = shield replacement; Task 2
= pushpin use), and calculate the probability that the farmer maintains…
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APPLICATION
• Alta Production, Inc., is using the account analyis approach to identify the beharior of
production costs for a month in which it prodaced 350 units. The production manager
was asked to review these costs and provide her best guess as to how they should be
catevorized. She resoonded with the followine information:
Tetal fe)
S270,000
134,000
101.000
$507.000
Variable (e)
S270,000
130,000
100,000
3500.000
Fixed
Materials used in production
Labor used in production
Production facility costs
Total production cost
4.000
3.000
37.000
• Alta Production, Inc., reported the following production costs for the 12 months
January through December.
Reporting Period (Month) Total Production Costs Level of Activity (Units Produced)
January
$460,000
300
February
300,000
220
March
480,000
330
Аpril
550,000
390
570,000
310,000
May
410
June
240
July
440,000
290
August
455,000
320
September
530,000
380
250,000
150
October
November
700,000
450
December
490,000
350
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I. Given:
= 1100
(2) P
Qd
Qs
= 3P
100
4.
Arc Elasticity where P = 250 and P = 200
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1. The table below presents hypothetical OLS results with used small SUV price information (in dollars) as the dependent variable. Assume that the model is correctly specified and a significance level (p-value) of 0.05.
Variable
Coefficient
P-Value
Constant
10,000
0.001
SUV is in Good Condition (GC)
1,000
0.030
SUV is Green (GRN)
500
0.040
Miles on the SUV (MGE)
-0.005
0.019
Age of the SUV (AGE)
-200
0.007
SUV has a Sunroof (SUN)
400
0.045
The number of miles on the SUV and the age in years of the SUV are continuous variables. The rest of the variables are dummy variables.
a. Write the predictive equation for the price of small used SUVs in this market.
b. According to this model, what is the predicted price of a 6 year old blue SUV in poor condition with 80,000 miles on it and no sunroof?
c. According to this model, what is the predicted price of an 8 year old green SUV in good condition with only 30,000 miles on it and a sunroof?
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When you solve full question I will give Thumb up ?
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Typed plzxxxxx
Asap
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per kg and the price of plastic cups is 13 OMR per 1000 cups. Plant requires differ-
ent machine which cost about 50,000 OMR, but the machines has to be imported,
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On a graph paper, draw a freehand graph and represent all important parameters.
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Find out the new plastic price?
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None
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and Q is the annual quantity demand.
• Total cost = Fixed cost + Variable cost
• Revenue Quantity Demand x Price
•Profit = Revenue - Total cost
a) Develop the equations for total cost and total revenue.
b) Find the breakeven quantity.
c) What profit is earned if i) total cost is minimized and ii) total revenue is maximized?
d) Which of the strategy will be better for the company to adopt to optimize their profit, is
it to minimize total cost or maximize total revenue. Give reason for your choice
e) What is the company's maximum possible profit?
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