Answered: Need fishbone about information?

Business

Operations Management

Need fishbone about information?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter3: Introduction To Optimization Modeling

Section: Chapter Questions

Problem 41P

See similar textbooks

Similar questions

The eTech Company is a fairly recent entry in the electronic device area. The company competes with Apple. Samsung, and other well-known companies in the manufacturing and sales of personal handheld devices. Although eTech recognizes that it is a niche player and will likely remain so in the foreseeable future, it is trying to increase its current small market share in this huge competitive market. Jim Simons, VP of Production, and Catherine Dolans, VP of Marketing, have been discussing the possible addition of a new product to the companys current (rather limited) product line. The tentative name for this new product is ePlayerX. Jim and Catherine agree that the ePlayerX, which will feature a sleeker design and more memory, is necessary to compete successfully with the big boys, but they are also worried that the ePlayerX could cannibalize sales of their existing productsand that it could even detract from their bottom line. They must eventually decide how much to spend to develop and manufacture the ePlayerX and how aggressively to market it. Depending on these decisions, they must forecast demand for the ePlayerX, as well as sales for their existing products. They also realize that Apple. Samsung, and the other big players are not standing still. These competitors could introduce their own new products, which could have very negative effects on demand for the ePlayerX. The expected timeline for the ePlayerX is that development will take no more than a year to complete and that the product will be introduced in the market a year from now. Jim and Catherine are aware that there are lots of decisions to make and lots of uncertainties involved, but they need to start somewhere. To this end. Jim and Catherine have decided to base their decisions on a planning horizon of four years, including the development year. They realize that the personal handheld device market is very fluid, with updates to existing products occurring almost continuously. However, they believe they can include such considerations into their cost, revenue, and demand estimates, and that a four-year planning horizon makes sense. In addition, they have identified the following problem parameters. (In this first pass, all distinctions are binary: low-end or high-end, small-effect or large-effect, and so on.) In the absence of cannibalization, the sales of existing eTech products are expected to produce year I net revenues of 10 million, and the forecast of the annual increase in net revenues is 2%. The ePIayerX will be developed as either a low-end or a high-end product, with corresponding fixed development costs (1.5 million or 2.5 million), variable manufacturing costs ( 100 or 200). and selling prices (150 or 300). The fixed development cost is incurred now, at the beginning of year I, and the variable cost and selling price are assumed to remain constant throughout the planning horizon. The new product will be marketed either mildly aggressively or very aggressively, with corresponding costs. The costs of a mildly aggressive marketing campaign are 1.5 million in year 1 and 0.5 million annually in years 2 to 4. For a very aggressive campaign, these costs increase to 3.5 million and 1.5 million, respectively. (These marketing costs are not part of the variable cost mentioned in the previous bullet; they are separate.) Depending on whether the ePlayerX is a low-end or high-end produce the level of the ePlayerXs cannibalization rate of existing eTech products will be either low (10%) or high (20%). Each cannibalization rate affects only sales of existing products in years 2 to 4, not year I sales. For example, if the cannibalization rate is 10%, then sales of existing products in each of years 2 to 4 will be 10% below their projected values without cannibalization. A base case forecast of demand for the ePlayerX is that in its first year on the market, year 2, demand will be for 100,000 units, and then demand will increase by 5% annually in years 3 and 4. This base forecast is based on a low-end version of the ePlayerX and mildly aggressive marketing. It will be adjusted for a high-end will product, aggressive marketing, and competitor behavior. The adjustments with no competing product appear in Table 2.3. The adjustments with a competing product appear in Table 2.4. Each adjustment is to demand for the ePlayerX in each of years 2 to 4. For example, if the adjustment is 10%, then demand in each of years 2 to 4 will be 10% lower than it would have been in the base case. Demand and units sold are the samethat is, eTech will produce exactly what its customers demand so that no inventory or backorders will occur. Table 2.3 Demand Adjustments When No Competing Product Is Introduced Table 2.4 Demand Adjustments When a Competing Product Is Introduced Because Jim and Catherine are approaching the day when they will be sharing their plans with other company executives, they have asked you to prepare an Excel spreadsheet model that will answer the many what-if questions they expect to be asked. Specifically, they have asked you to do the following: You should enter all of the given data in an inputs section with clear labeling and appropriate number formatting. If you believe that any explanations are required, you can enter them in text boxes or cell comments. In this section and in the rest of the model, all monetary values (other than the variable cost and the selling price) should be expressed in millions of dollars, and all demands for the ePlayerX should be expressed in thousands of units. You should have a scenario section that contains a 0/1 variable for each of the binary options discussed here. For example, one of these should be 0 if the low-end product is chosen and it should be 1 if the high-end product is chosen. You should have a parameters section that contains the values of the various parameters listed in the case, depending on the values of the 0/1 variables in the previous bullet For example, the fixed development cost will be 1.5 million or 2.5 million depending on whether the 0/1 variable in the previous bullet is 0 or 1, and this can be calculated with a simple IF formula. You can decide how to implement the IF logic for the various parameters. You should have a cash flows section that calculates the annual cash flows for the four-year period. These cash flows include the net revenues from existing products, the marketing costs for ePlayerX, and the net revenues for sales of ePlayerX (To calculate these latter values, it will help to have a row for annual units sold of ePlayerX.) The cash flows should also include depreciation on the fixed development cost, calculated on a straight-line four-year basis (that is. 25% of the cost in each of the four years). Then, these annual revenues/costs should be summed for each year to get net cash flow before taxes, taxes should be calculated using a 32% tax rate, and taxes should be subtracted and depreciation should be added back in to get net cash flows after taxes. (The point is that depreciation is first subtracted, because it is not taxed, but then it is added back in after taxes have been calculated.) You should calculate the company's NPV for the four-year horizon using a discount rate of 10%. You can assume that the fixed development cost is incurred now. so that it is not discounted, and that all other costs and revenues are incurred at the ends of the respective years. You should accompany all of this with a line chart with three series: annual net revenues from existing products; annual marketing costs for ePlayerX; and annual net revenues from sales of ePlayerX. Once all of this is completed. Jim and Catherine will have a powerful tool for presentation purposes. By adjusting the 0/1 scenario variables, their audience will be able to see immediately, both numerically and graphically, the financial consequences of various scenarios.
Seas Beginning sells clothing by mail order. An important question is when to strike a customer from the companys mailing list. At present, the company strikes a customer from its mailing list if a customer fails to order from six consecutive catalogs. The company wants to know whether striking a customer from its list after a customer fails to order from four consecutive catalogs results in a higher profit per customer. The following data are available: If a customer placed an order the last time she received a catalog, then there is a 20% chance she will order from the next catalog. If a customer last placed an order one catalog ago, there is a 16% chance she will order from the next catalog she receives. If a customer last placed an order two catalogs ago, there is a 12% chance she will order from the next catalog she receives. If a customer last placed an order three catalogs ago, there is an 8% chance she will order from the next catalog she receives. If a customer last placed an order four catalogs ago, there is a 4% chance she will order from the next catalog she receives. If a customer last placed an order five catalogs ago, there is a 2% chance she will order from the next catalog she receives. It costs 2 to send a catalog, and the average profit per order is 30. Assume a customer has just placed an order. To maximize expected profit per customer, would Seas Beginning make more money canceling such a customer after six nonorders or four nonorders?
Our aim is to take increase toy paratrooper flight time with the parachutes provided and find suitable alternatives to reduce its descent through the most feasible means. The justification for increased flight time being if we were to take these model paratroopers to represent actual paratroopers' lower descent speeds will provide safer landings and more maneuverable descents. We learned through observation that our paratrooper's initial descent is practically freefall and extremely erratic which gives us our main point of optimization. Our only variables which we can alter are wind resistance provided by said parachute, elevation, conditions(temperature) within a margin, and weight. We will make alterations where it is possible to reach our goal of a practical lower descent speed and thereby an increase in descent time and more stable, safe flight for our toy paratroopers. Need fishbone or ishikawa about information?
The Big Bang Novelty Company (BBNC) makes 3 types of noise?makers: Toot, Wheet, and Honk. A Toot can be made in 30 minutes and has a feather attached to it. A Wheet requires 20 minutes, has two feathers, and is sprinkled with 0.5 ounces of sequin powder. The Honk requires 30 minutes, three feathers, and 1 ounce of sequin powder. The unit profits are $0.45 per Toot, $0.55 per Wheet, and $0.70 per Honk. The following resources are available: 80 hours of labor, 360 feathers, and 90 ounces of sequin powder. BBNC would like to maximize the overall profit from the noise-makers. (a) Write the linear programming model. Express labor time in minutes in LP formulationb) Solve using Excel Solver. How much of the resources (labor, feathers, and sequin powder) will be used by the optimal solution? If the availability of labor increases by 10 hours, what is the optimal total profit? If the unit profit of Wheet is actually only $0.30 instead of $0.55, will this change the solution? How many of each…
Suppose a certain manufacturing company produces connecting rods for 4- and 6-cylinder automobile engines using the same production line. The cost required to set up the production line to produce the 4-cylinder connecting rods is $2,200, and the cost required to set up the production line for the 6-cylinder connecting rods is $3,300. Manufacturing costs are $12 for each 4-cylinder connecting rod and $16 for each 6-cylinder connecting rod. Hawkins makes a decision at the end of each week as to which product will be manufactured the following week. If a production changeover is necessary from one week to the next, the weekend is used to reconfigure the production line. Once the line has been set up, the weekly production capacities are 6,000 6-cylinder connecting rods and 8,000 4-cylinder connecting rods. Let x4 = the number of 4-cylinder connecting rods produced next week x6 = the number of 6-cylinder connecting rods produced next week s4 = 1 if the production line is set up to…
You own a wheat warehouse with a capacity of 20 bushels. At the beginning of month 1, you have 6 bushels of wheat. Each month, wheat can be bought and sold at the prices per one bushel shown in the above table. The sequence of events during each month is as follows: You observe your initial stock of wheat. You can sell any amount of wheat up to your initial stock at the current month's selling price. You can then buy as much wheat as you want, subject to the warehouse capacity Determine how to maximize the profit earned over the next 10 months.
Is my solution correct and did I fully answer the questions? (see attachment for my solution) Question: There are three factories on Momiss River. Each emits two types of pollutants, labeled P1 and P2, into the river. If the waste from each factory is processed, the pollution in the river can be reduced. It costs $1,500 to process a ton of factory 1 waste, and each ton processed reduces the amount of P1 by 0.10 ton and the amount of P2 by 0.45 ton. It costs $2,500 to process a ton of factory 2 waste, and each ton processed reduces the amount of P1 by 0.20 ton and the amount of P2 by 0.25 ton. It costs $3,000 to process a ton of factory 3 waste, and each ton processed reduces the amount of P1 by 0.40 ton and the amount of P2 by 0.50 ton. The state wants to reduce the amount of P1 in the river by at least 125 tons and the amount of P2 by at least 175 tons. a. Use Solver to determine how to minimize the cost of reducing pollution by the desired amounts. Are the LP assumptions…
Type the linear program, optimal solution, and objective function value in a word document. Submit your excel file A company produces three different types of wrenches: W1, W2, and W3. It has a firm order for 2,000 W1 wrenches, 3,750 W2 wrenches, and 1,850 W3 wrenches. Between now and the delivery date, the company has only 17,500 fabrication hours and 1,600 inspection hours. The time that each wrench requires in each department is shown in the table for this problem. Also shown are the costs to manufacture the wrenches in-house and the costs to outsource them. For labelling considerations, the company wants to manufacture in-house at least 60% of each type of wrench that will be shipped. How many wrenches should be outsourced? What will be the total cost to satisfy the order? Wrench Fabrication Hours Inspection Hours In-House Cost Outsource Cost W1 2.25 0.25 $17.00 $19.00 W2 3.25 0.30 $19.00 $21.00 W3 3.75 0.45 $22.00 $24.00
Suppose a certain manufacturing company produces connecting rods for 4- and 6-cylinder automobile engines using the same production line. The cost required to set up the production line to produce the 4-cylinder connecting rods is $2,300, and the cost required to set up the production line for the 6-cylinder connecting rods is $3,500. Manufacturing costs are $16 for each 4-cylinder connecting rod and $18 for each 6-cylinder connecting rod. Hawkins makes a decision at the end of each week as to which product will be manufactured the following week. If a production changeover is necessary from one week to the next, the weekend is used to reconfigure the production line. Once the line has been set up, the weekly production capacities are 5,000 6-cylinder connecting rods and 8,000 4-cylinder connecting rods. Let x4 = the number of 4-cylinder connecting rods produced next week x6 = the number of 6-cylinder connecting rods produced next week s4 = 1 if the production line is set up to…
Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of $400 and $800, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 400 assembly hours per week. What if market conditions are such that Patz can sell at most 100 units of Part A and 80 units of Part B? Express the objective function with its associated constraints for this case. Objective function: Max Z = $400 A + $800 B Assembly-hour constraint fill in the blank 7 A + fill in the blank 8 B ≤ fill in the blank 9 Demand constraint for Part A A ≤ fill in the blank 10 Demand constraint for Part B B ≤ fill in the blank 11 Identify the optimal mix and its associated total contribution margin.Component A $fill in the blank 12 units Component B $fill in the blank 13 units Total contribution $fill in the blank 14
What are some common properties of LP models? What is the three-step process for solving LP models? How are constraints modeled graphically? What is the corner point property? How is it useful in solving LP models?
Failsafe Electronics Corporation primarily manufactures four highly technical products, which it supplies to aerospace firms that hold NASA contracts. Each of the products must pass through the following departments before they are shipped: wiring, drilling, assembly, and inspection. The time requirements in each department (in hours) for each product and its corresponding profit value are summarized below: (see attached images for the complete details of the problem. Please answer it with solutions. Thank you so much! Godbless.) Solve this LP problem as formulated. What is the solution?