A company is introducing reusable straws in the market on the 1st of January 2022. They estimate the total market for reusable straws is approximately 3 million per year. The company expects to sell 500000 straws in the first year. There is a competitor already in the market whose sales per year is 1 million straws per year. Your group have been hired as consultants to answer the following questions: Q1- The company is building a facility to produce 1 million straws per year. Is this capacity just right, too little or too much? What factors will you consider in building capacities? Should they adopt a a) leading strategy b) lag strategy or c) straddle strategy to build further capacities. Please justify

A company is introducing reusable straws in the market on the 1st of January 2022. They estimate the total market for reusable straws is approximately 3 million per year. The company expects to sell 500000 straws in the first year. There is a competitor already in the market whose sales per year is 1 million straws per year. Your group have been hired as consultants to answer the following questions: Q1- The company is building a facility to produce 1 million straws per year. Is this capacity just right, too little or too much? What factors will you consider in building capacities? Should they adopt a a) leading strategy b) lag strategy or c) straddle strategy to build further capacities. Please justify

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 35P

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It costs a pharmaceutical company 75,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 20,000 pounds, the most likely case 17,500 pounds, and the worst case 10,000 pounds. The drug sells for 125 per pound and leftover amounts of the drug can be sold for 30 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known.
A company is introducing reusable straws in the Canadian market on 1st of January 2022. They estimate the total market for reusable straws in Canada is approximately 3 million per year. The company expects to sell 500000 straws in the first year. There is a competitor already in the market whose sales per year is 1 million straws per year. Your group have been hired as consultants to answer the following questions: Q 1-The company is building a facility to produce 1 million straws per year. Is this capacity just right, too little or too much? What factors will you consider in building capacities? Should they adopt a a) leading strategy b) lag strategy or c) straddle strategy to build further capacities. Please justify. Q-2The company also wants you to recommend an aggregate planning strategy. They have provided you with the following information. Month Expected Demand Production Days January 2022 35000 22 February 2022 30000 18 March 37000 22 April…
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A scientist works in a lab with four summer interns and, as it is the end of the summer, he anticipates the head of the lab will ask him which of them he wants to retain. In terms of quality, the scientist and the head of the lab agree that intern A is better than intern B who is better than intern C who is better than intern D. The scientist would like to keep as many interns as possible and, given any number, the highest-quality ones. However, due to funding restrictions, the head of the lab wants to limit the number of interns that are retained. The head of the lab initially tells the scientist to select two interns to retain. After the scientist chooses two interns, the head of the lab decides whether to allow the scientist to retain a third intern. Thus, the sequence of moves is: 1) the scientist chooses two interns (both of whom are then retained); 2) the head of the lab decides either to allow the scientist to choose a third or not; and possibly 3) if the head of the lab chose…
You have two design options for your new line of high-resolution monitors for Computer-Aided Design (CAD)workstations. The production run is for 110,000 units. Design option A has a .90 probability of yielding 65good monitors per 100 and a .10 probability of yielding 70good monitors per 100. This design will cost $1,000,000. Design option B has a .80 probability of yielding 65good units per 100 and a .20 probability of yielding 60good units per 100. This design will cost $1,350,000. Good or bad, each monitor will cost $75. Each good monitor will sell for $150. Bad monitors are destroyed and have no salvage value. We ignore any disposal costs in this problem. Demonstrate how decision trees can be used in order to choose the design option based on the above situation. Calculate the expected monetary value (EMV) of each option and determine which option you will propose.
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