RUMSTAD

885 Words4 Pages
Please type your work in Microsoft Word. Given that the clew website is not available, assignments are to be collected at the beginning of the class on Wednesday, October 09, 2013. Late assignments are not accepted. This assignment is designed to be individual. Identical assignments will not be graded and automatically assigned a grade of zero. 1. (10 points) You have collected the processing time for five units of Product X at different points in time and the relevant data are shown in the following table: Unit Number Time (Hours) 3 11.25 12 9.05 32 7.02 56 6.1 80 5.2 a. Construct a scatter diagram showing the hours against the unit numbers. Is the relationship between hours and unit numbers linear or…show more content…
Consequently, it has been expanding its manufacturing capacity in North America. Historically, the cost function of expanding its capacity obeys the law of f(y) = kya, where y is measured in # of cars produced each week and f(y) in millions of dollars. a. Given past experience, every doubling of its manufacturing capacity results in an increase in construction cost of 68%. Find the value of a. b. Based on the value of a determined in part a) and a discount rate for future cost of 15%, determine the optimal timing of plant additions. To assist your calculation, the figure depicting the relationship between a and rx is furnished on the last page. c. If a plant size of 4,000 cars per week costs $10 million, find the value of k. d. If the demand for its cars increases at 500,000 cars per year, compute the present cost of adding the next two plants, the first one is added now and the second is added after the optimal number of years calculated in part b. Assume that the plant closes for two weeks for maintenance in July every year and remains open for the rest of the year. Use annual compounding for your calculations. (Hint: Please keep track of units in your calculations). 4. (10 points) Your manager asks you to forecast demand for a popular product ABC in your firm. She has provided you with the following historical demand data for the first six months in 2013 (Assume that you are at the end of June 2013) and would like you

More about RUMSTAD

Get Access