Strategy Sample Test

Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.

13) Refer to the table. What is the average number of customers in the queue plus the number being served?

Imagine that you have decided to open a small ice cream stand on campus called "Ice-Campusades." You are very excited because you love ice cream (delicious!) and this is a fun way for you to apply your business and economics skills! Here is the first month's scenario--you order the same number (and the same variety) of ice creams each day from the ice cream suppliers, and your ice creams are always marked at $1.50 each. However, you notice that there are days when ice creams remain unsold but other days when there are not enough ice creams for the number of customers.

Thus we get 6+2*(2+1+2)+1=17 min of valuable time for two orders. For three orders we get 6+3*(2+1+2)+1=22 min of valuable time. A further assumption is that the costs of my and my roommate’s time are L per hour, then the average costs for the first dozen are: (12/60)*L= 0,2L, for the second dozen: ((17/60)*L)/2=0,142L, for the third dozen: ((22/60)*L)/3=0,122. We see that the costs for each the second and the third dozens are less than for the first. Thus, we can give discount on orders for more than one dozen. These can be for the first dozen up to (0,2-0.141)*L=0.058L for the second dozen, and (0,2-0,122)*L=0,078L for the third order.

2. At a steady state we'd be able to produce 6 (process capacity) x 4 (hours) = 24 dozen per night. At a starting state, assuming that 1st dozen takes 26 minutes, and we move into a steady state of production, we

B. 1. The impact of costs on the decision to move forward with the new Maui Sandal line is as follows: As the production continues, the hours needed for each batch, or individual pair, will begin to decrease. By continuing to produce this line the total labor costs will continue to decrease, but most likely, at a slower rate as more sandals are produced. This data can help the company decide employment levels, capacity, costs, and their pricing of this particular merchandise in the open market. The company predicts that it will take 1,000 labor hours for production to complete for the first batch, with 50 total batches between month 1 and month 4.

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

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

2. What is the maximum long-term achievable throughput rate of receiving Plant 1? What factors affect this throughput rate?

A. The simulated function given in the Excel spreadsheet “Hamptonshire Express: Problem_#1” allows the user to find the optimal quantity of newspapers to be stocked at the newly formed Hamptonshire Express Daily Newspaper. Anna Sheen estimated the daily demand of newspapers to be on a normal standard distribution; stating that daily demand will have a mean of 500 newspapers per day with a standard deviation of 100 newspapers per day. Using the function provided, the optimal stocking quantity, which maximizes expected profit, is determined to be approximately 584 newspapers. If 584 newspapers were to be ordered, Hamptonshire Express will net an

30. The manager of the local National Video Store sells videocassette recorders at discount prices. If the store does not have a video recorder in stock when a customer wants to buy one, it will lose the sale because the customer will purchase a recorder from one of the many local competitors. The problem is that the cost of renting warehouse space to keep enough recorders in inventory to meet all demand is excessively high. The manager has determined that if 90% of customer demand for recorders can be met, then the combined cost of lost sales and inventory will be minimized. The manager has estimated that monthly demand for recorders is normally distributed, with a mean of 180 recorders and a standard deviation of 60. Determine the number of recorders the manager should order each month to meet 90% of customer demand.

Each week there are 300 pounds of material 1; 400 pounds of material 2; and 200 hours of labor. The output of product A should not be more than one-half of the total number of units produced. Moreover, there is a standing order of 10 units of product C each week.

Setup for the machine is done for one batch of items. If we look at the the batch size of valves, it will be 375 units(=7500 units/ 20 production runs)

If we choose to run business without Kristen, her time for one dozen cookies becomes 12 minutes. It will become the labor bottleneck. If the order contains two dozens or more, Kristen’s time for this order becomes 17 minutes and 22 minutes for 3 dozens. For the delay time, there is no need to offer a rate to rush order. Because of our constrains, previous order can be finished on time. We can promise delivery within the campus from 10am to 5pm. Because this period of time would be acceptable for part-time student. We can use message to notify our customers when orders are ready. What we

5. From the information we get above, I would recommend an order quantity that can maximize the expected profit, and it can be calculated by the formula below: P(Demand<=Q) = C1/(C1+C2).