1. Buskin's Donuts can make donuts for $0.25 each with theircurrent equipment. They could purchase a different fryer for$12,000 which would reduce their costs to $0.20 each. Or,they could buy a bigger fryer for $42,000 and decrease theircost to $0.17 each. Find the break-even points and graph yoursolution. Over what output range would each option bepreferred?2. Madonna's Burgers is considering making hamburger buns in-house instead of buying them from its supplier. It hasestimated the fixed costs for a used over to be $7,000 and thevariable costs for the buns to be $0.25. It purchases buns for$0.50 each, and there are no fixed purchase costs. Its annualdemand for buns is forecasted to be 15,000. Madonna's wantsto know how many buns it has to make to break even.3. Josh's Hot Dogs is a one-person hot dog stand, and normallygets about 14 customers per hour. Assuming that Josh canserve one customer in about 3 minutes. What impact does thishave on the queuing characteristics? Specifically, thefollowing questions:a. Mean number of customer in the queueb. Mean number of customer in the system:c. Mean waiting time in the queue:d. Mean waiting time in the system:Utilization factor for the system:e.f. Probability of more than 1 customer in the system at anyg.given time.Do youthink he has an acceptable queuing system?

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 30P

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