Monsanto sells genetically modified seed to farmers. It needs to decide how much seed to put into a warehouse to serve demand for the next growing season. It will make one quantity decision. It costs Montanso $6 to make each kilogram (kg) of seed. It sells each kg for $45. If it has more seed than demanded by the local farmers, the remaining seed is sent overseas. Unfortunately, it only earns $2 per kg from the overseas market (but this is better than destroying the seed because it cannot be stored until next year). If demand exceeds its quantity, then the sales are lost—the farmers go to another supplier. As a forecast for demand, it will use a normal distribution with a mean of 325,000 and a standard deviation of 150,000. Use Table 13.4 a. How many kilograms should Montanso place in the warehouse before the growing season? Use Table 13.4 and round-up rule. b. If Montanso put 400000 kgs in the warehouse, what is its expected revenue (include both domestic revenue and overseas revenue)? Use Table 13.4 and round-up rule. c. How many kilograms should Montanso place in the warehouse to minimize inventory while ensuring that the stockout probability is no greater than 5%? Use Table 13.4 and round-up rule. d. What is maximum profit for this seed?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Monsanto sells genetically modified seed to farmers. It needs to decide how much seed to put into a warehouse to serve demand for the next growing season. It will make one quantity decision. It costs Montanso $6 to make each kilogram (kg) of seed. It sells each kg for $45. If it has more seed than demanded by the local farmers, the remaining seed is sent overseas. Unfortunately, it only earns $2 per kg from the overseas market (but this is better than destroying the seed because it cannot be stored until next year). If demand exceeds its quantity, then the sales are lost—the farmers go to another supplier. As a
| a. | How many kilograms should Montanso place in the warehouse before the growing season? Use Table 13.4 and round-up rule. |
| b. | If Montanso put 400000 kgs in the warehouse, what is its expected revenue (include both domestic revenue and overseas revenue)? Use Table 13.4 and round-up rule. |
| c. | How many kilograms should Montanso place in the warehouse to minimize inventory while ensuring that the stockout probability is no greater than 5%? Use Table 13.4 and round-up rule. |
| d. | What is maximum profit for this seed? |
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