Mat 540 Week 7 Homework

1. Assume Over-land could service the contract with existing equipment. Use Exhibit 1 to identify the relevant costs concerning the acceptance of FHP’s request to add two additional loads per week. Which costs are not relevant? Why?

11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is the total amount expressed on a per unit basis?

(3 marks) c) Determine the optimal number of bus and train travelers. (2 marks) d) Say a train strike significantly reduced the number of trains available. By how much would the train capacity constraint have to fall for the optimal solution to be altered? (2 marks)

In, 8 hours a day, the company can produce 60 * 8 * (1/0.5) = 960 shirts, which is the current production capacity. But it needs to produce only 800 shirts.

Question 2: Assume all conditions in question 1 hold, except that Low’s supplier now offers a quantity discount in the form of absorbing all or part of Low’s order processing costs. For orders of 750 or more kegs of nails, the supplier will absorb all the order

* The variances are due to the Mile High Cycle company not forecasting for increased production. The company budgeted for the production of 10,000 cycles but the actual production was 10,800 units. When the company increased production, the production efficiency decreased. The company had to use or rework parts that added extra cost to the expenses; the reworked parts added $25,000 of extra expenses to the wheel assembly production and $45,000 to the final assembly process. The material,

|Price of Belgium cocoa beans|Quantity of Belgium cocoa beans |Quantity of Belgium cocoa beans |Total Demanded |

Minimizing FN results would increase sensitivity because when the FN is minimized the TP is maximized so as to maintain a constant denominator (TP + FN). So increasing the value of TP will result in increasing sensitivity.

Saylor manufactures products X and Y, applying overhead on the basis of labor hours. X,

A. Assuming the number of hours Anna Sheen will spend developing the profile section will = 4; Ralph Armentrout’s optimal stocking quantity is 516, as portrayed in the table below:

a. Compute the single indirect cost allocation rate that the bank would use to allocate the total indirect costs presented in Exhibit B. (Total indirect costs/total value of checks processed, in thousands)

14) Consider the following transshipment problem. The shipping cost per unit between nodes 1 and 2 is $10, while the shipping cost per unit between nodes 2 and 3 is $12. What is the objective function?

11) By how much would the profit contribution of product A has to increase before it will be profitable to produce A?

When considering operational constraints we looked at people, location, premises, equipment, money, materials, other related activities and services.

Write a constraint to ensure that if machine 4 is used, machine 1 will not be used.