A mining company brings up a land purchase project for 61,000 TL. in order to extract coal. The annual net income of the coal mine is estimated at TL 20,000. At the end of the 10-year useful life, the company is obliged to spend 150.000 TL to make the land suitable for agriculture. Is the project suitable since the annual interest rate is i=10%? Solve according to NBD analysis.

A mining company brings up a land purchase project for 61,000 TL. in order to extract coal. The annual net income of the coal mine is estimated at TL 20,000. At the end of the 10-year useful life, the company is obliged to spend 150.000 TL to make the land suitable for agriculture. Is the project suitable since the annual interest rate is i=10%? Solve according to NBD analysis.

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...

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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.
The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
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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.
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Newell and Jeff are the two barbers in a barber shop they own and operate. They provide two chairs forcustomers who are waiting to begin a haircut, so the number of customers in the shop varies between 0 and 4.For n = 0, 1, 2, 3, 4, the probability Pn that exactly n customers are in the shop. A. Calculate L . How would you describe the meaning of L to Newell and Jeff?B. For each of the possible values of the number of customers in the queueing system, specify howmany customers are in the queue. Then calculate Lq . How would you describe the meaning of Lq to Newelland Jeff? C.Determine the expected number of customers being served. D. Given that an average of 4 customers per hour arrive and stay to receive a haircut, determine W andWq . Describe these two quantities in terms meaningful to Newell and Jeff. E. Given that Newell and Jeff are equally fast in giving haircuts, what is the average duration of ahaircut?
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