41. A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the new equipment. The spares cost $200 each, and any unused spares will have an expected salvage value of $50 each. The probability of usage can be described by this distribution: Number 0 1 2 3 Probability 10 .50 .25 15 If a part fails and a spare is not available, two days will be needed to obtain a replacement and install it. The cost for idle equipment is $500 per day. What quantity of spares should be ordered? a. Use the ratio method. b. Use the tabular method (see Table 12.3). Page 553

41. A manager is going to purchase new processing equipment and must decide on the number of spare parts to order with the new equipment. The spares cost $200 each, and any unused spares will have an expected salvage value of $50 each. The probability of usage can be described by this distribution: Number 0 1 2 3 Probability 10 .50 .25 15 If a part fails and a spare is not available, two days will be needed to obtain a replacement and install it. The cost for idle equipment is $500 per day. What quantity of spares should be ordered? a. Use the ratio method. b. Use the tabular method (see Table 12.3). Page 553

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 45P: You now have 10,000, all of which is invested in a sports team. Each year there is a 60% chance that...

See similar textbooks

Similar questions

At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is 100, 90, 50, or 10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of 200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.
You now have 10,000, all of which is invested in a sports team. Each year there is a 60% chance that the value of the team will increase by 60% and a 40% chance that the value of the team will decrease by 60%. Estimate the mean and median value of your investment after 50 years. Explain the large difference between the estimated mean and median.
4. From past experience, Anna knows that the probability that her friend will take her to dinner in Orro Resto id 0.7, the probability that they will watch movies is 0.5, and the probability that he will take her to dinner or they will watch movies is 0.9. What is the probability that they will do both? they will do neither? 5. Eight persons enter a supermarket. From the past experience, it is known that 25% of the people entering the supermarket make a purchase. What is the possible values of the random variable X? Construct the probability distribution of X. X P(X=x) What is the probability that 1) at least four persons will make a purchase? 2) two or three persons will make a purchase? 3) a most two persons will make a purchase?
A certain reagent is created to test for an infectious disease. The test has anaccuracy rate of p = 90%, and the accuracy does not depend on whether or not thepatient is actually infected. a. If four people are tested for the disease, what is the probability that at leastthree of them receive accurate test results? b. In an area where q = 5% of people are infected, a man’s test result ispositive. What is probability that it is a false positive (which means that he is notinfected but the test is positive due to inaccuracy)? *please solve for a-b, type or neatly write your answers on paper, NO EXCEL* thank you !
A manager is going to purchase new processing equipment and must decide on the number ofspare parts to order with the new equipment. The spares cost $200 each, and any unused spareswill have an expected salvage value of $50 each. The probability of usage can be described by thisdistribution:Number 0 1 2 3Probability .10 .50 .25 .15If a part fails and a spare is not available, two days will be needed to obtain a replacementand install it. The cost for idle equipment is $500 per day. What quantity of spares should beordered?a. Use the ratio method.b. Use the tabular method (see Table 13.3).
A company installs new central-heating furnaces and has found that for 15% of all installations, a return visit is needed to make some modifications. Six installations were made in a particular week. Assume independence of outcomes for these installations.a. What is the probability that a return visit will be needed in all these cases?b. What is the probability that a return visit will be needed in none of these cases?c. What is the probability that a return visit will be needed in more than 1 of these cases?
The number of hybrid cars that have be requested for rental from a car rental office during a 50 day sample period is given in the following table. Demand for Cars Number of Days Probability 3 3 0.06 4 7 0.14 5 12 0.24 6 14 0.28 7 10 0.20 8 4 0.08 50 1.00What is the expected (mean) number of hybrid rentals per day? Compute to one decimal place.
Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that ther is a probability of 0.40 that the ATR Co. does not follow with a competitive product. Weiss's expected profit is $50,000; If weiss adds an assembley line and ATR follows suit, Weiss still expects $15,000 profit. If Weiss adds a new plant addition adn ATR does not produce a competitive product, weiss expects a profit of $600,000; if ATR does compete for this market, weiss expects a loss of $100,000 a) Expected value for the Add Assembly Line option=$____
11. Bakery Products is considering the introduction of a new line of pastries. In order to produce the new line, the bakery is considering either a major or a minor renovation of its current plant. Bill Wicker, head of operations, has developed the following conditional values table: Alternatives Favorable Market Unfavorable Market Major renovation $100,000 -$90,000Minor renovation $40,000 -$20,000 Do nothing $0 $0 Assume that the probability of a favorable market is equal to the probability of an unfavorable market.Part 2a) Choose the appropriate decision tree showing payoffs and probabilities.A.MinorFavorable40,000Unfavorable-20,000UnfavorableFavorableMajor100,000-90,000Do…
A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the event that the overnight temperature falls to a level well below freezing. If the temperature drops too low he runs the risk of losing his entire crop, valued at $75,000. Based on the National Weather Service, the probability of such a temperature drop is 60%. He can insulate his crop by spraying water on all the trees, which will cost $20,000. This action might succeed in protecting the crop, with the following possible outcomes: Probability Damage 0.30 $0 0.15 $5,000 0.10 $10,000 0.15 $15,000 0.30 $20,000 Construct a decision tree to help the farmer make his decision. What should he do? Explain your answer. Find the highest cost of insulating the grapefruits for which the farmer prefers to insulate his crop. Suppose the farmer is uncertain about the reliability of the National Weather Service forecast. If he thinks the probability of…
A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the event that the overnight temperature falls to a level well below freezing. If the temperature drops too low he runs the risk of losing his entire crop, valued at $75,000. Based on the National Weather Service, the probability of such a temperature drop is 60%. He can insulate his crop by spraying water on all the trees, which will cost $20,000. This action might succeed in protecting the crop, with the following possible outcomes: Probability Damage 0.30 $0 0.15 $5,000 0.10 $10,000 0.15 $15,000 0.30 $20,000 a. Construct a decision tree to help the farmer make his decision. What should he do? b. Find the highest cost of insulating the grapefruits for which the farmer prefers to insulate his crop. c. Suppose the farmer is uncertain about the reliability of the National Weather Service forecast. If he thinks the probability of a freeze occurring…
A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the event that the overnight temperature falls to a level well below freezing. If the temperature drops too low he runs the risk of losing his entire crop, valued at $75,000. Based on the National Weather Service, the probability of such a temperature drop is 60%. He can insulate his crop by spraying water on all the trees, which will cost $20,000. This action might succeed in protecting the crop, with the following possible outcomes: Probability Damage 0.30 $0 0.15 $5,000 0.10 $10,000 0.15 $15,000 0.30 $20,000 Construct a decision tree to help the farmer make his decision. What should he do?