1. The chili company produces three different types of chili sauce. To produce chilione pack requires the following ingredients:Chili typeSambal xSambal ySambal zWhich is availableOnion86148TomatoesChilli4111664540The profit from each product is that sambal x costs IDR 1,500/pack, sambal y IDR2,500/pack, and sambal z IDR 900/pack. Determine what is the optimumproduction so that all resources are properly absorbed and get maximum profit!(Hint: solve with the simplex method)

Linear programming is a mathematical technique that is also used in operations management…

Answered: The profit from each product is that…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section: Chapter Questions

Problem 67P

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Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
Referring to Example 11.1, if the average bid for each competitor stays the same, but their bids exhibit less variability, does Millers optimal bid increase or decrease? To study this question, assume that each competitors bid, expressed as a multiple of Millers cost to complete the project, follows each of the following distributions. a. Triangular with parameters 1.0, 1.3, and 2.4 b. Triangular with parameters 1.2, 1.3, and 2.2 c. Use @RISKs Define Distributions window to check that the distributions in parts a and b have the same mean as the original triangular distribution in the example, but smaller standard deviations. What is the common mean? Why is it not the same as the most likely value, 1.3?
In Problem 12 of the previous section, suppose that the demand for cars is normally distributed with mean 100 and standard deviation 15. Use @RISK to determine the best order quantityin this case, the one with the largest mean profit. Using the statistics and/or graphs from @RISK, discuss whether this order quantity would be considered best by the car dealer. (The point is that a decision maker can use more than just mean profit in making a decision.)
(1) When chef Paolo prices his speciality ‘pizza-n-all’ meal at £25, he sells 20 meals a day. When he prices his pizza meal at £22, he sells 21 meals a day. Suppose Paolo reduces his price from £25 to £22. Explain the impact of the price reduction on the revenue he receives from the first 20 meals he sells. Total Revenue – Price X Quantity. Revenue @ £25 = £25 X 20 = £500. Revenue @ £22 = £25 X 20 = £440 The impact of the price reduction is a reduction in total revenue of £60 (-12%) over the first 20 meals that he sells. Calculate the additional revenue generated from the additional meals he sells when he lowers his price to £22. Total Revenue = Price X Quantity. Total Revenue @ £22 = £22 X 21 = £462. Additional Revenue = Revenue @ £25 – revenue @ £22 = £500 - £462 = -£38. Calculate the marginal revenue Paolo receives from the 21st meal. How does that amount relate to the amounts you calculated in (a) and (b)? (3%) Suppose Paolo reduces his price from £25 to £22. Explain…
A company manufactures two products. If it charges aprice pi for product i, it can sell qi units of product i, whereq1 60 3p1 p2 and q2 80 2p2 p1. It costs $25to produce a unit of product 1 and $72 to produce a unit ofproduct 2. How many units of each product should beproduced to maximize profits?
A company manufactures two products. If it chargesprice pi for product i, it can sell qi units of product i,where q1 = 60 - 3p1 + p2 and q2 = 80 - 2p2 + p1. Itcosts $5 to produce a unit of product 1 and $12 to produce a unit of product 2. How many units of eachproduct should the company produce, and what pricesshould it charge, to maximize its profit? Use spreadsheet modelling in Excel
1.A clockmaker makes two types of woodenclocksto sell at various malls. It takes him three hours to assemble a pine clock, which requires two oz of varnish. It takes four hours to assemblea molave clock, which takes four oz of varnish. He has eight oz of varnish available in stock and can work 12 hours. If he makes a P100 profit on each pine clock and P120 on each molave clock, how many of each type should he make to maximize his profit?2.A biologist is developing two new strains of bacteria. Each sample of Type A bacteria produces five new viable bacteria,and each Type B bacteria produces six new viable bacteria. Altogether, at least 150 new viable bacteria must be produced. At least 10, but not more than 20,of the original sample,must be Type A,and not more than 60 of the samples must be Type B. A sample of Type A costs P500,and a sample of Type B costs P700. If both types are to be used, how many samples of each type should be used to minimize the cost?
Sodaco is considering producing a new product:Chocovan soda. Sodaco estimates that the annual demandfor Chocovan, D (in thousands of cases), has the followingmass function: P(D 30) .30, P(D 50) .40,P(D 80) .30. Each case of Chocovan sells for $5 andincurs a variable cost of $3. It costs $800,000 to build aplant to produce Chocovan. Assume that if $1 is receivedevery year (forever), this is equivalent to receiving $10 atthe present time. Considering the reward for each action andstate of the world to be in terms of net present value, useeach decision criterion of this section to determine whetherSodaco should build the plant.
Assume the demand for a company’s drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year,it will cost $16x. Each unit of Wozac is soldfor $3. Each unit of Wozac produced -incurs a variable production cost of $0.20. It costs $0.40 per year to operate a unit of capacity.Determine how large a Wozac plant the company should build to maximize its-expected profit over the next 10 years.
Suppose that the number of ounces of soda put into aPepsi can is normally distributed, with m 12.05 oz ands .03 oz.a Legally, a can must contain at least 12 oz of soda.What fraction of cans will contain at least 12 oz of soda?b What fraction of cans will contain under 11.9 oz ofsoda?c What fraction of cans will contain between 12 and12.08 oz of soda?d 1% of all cans will contain more than oz.e 10% of all cans will contain less than oz.f Pepsi controls the mean content in a can by setting atimer. For what mean should the timer be set so that only1 in 1,000 cans will be underfilled?
A company produces three types of items. A singlemachine is used to produce the three items on a cyclicalbasis. The company has the policy that every item isproduced once during each cycle, and it wants to determinethe number of production cycles per year that will minimizethe sum of holding and setup costs (no shortages areallowed). The following data are given:Pi number of units of product i that could be producedper year if the machine were entirely devoted toproducing product iDi annual demand for product iKi cost of setting up production for product ihi cost of holding one unit of product i in inventoryfor one yeara Suppose there are N cycles per year. Assuming thatduring each cycle, a fraction N1of all demand for eachproduct is met, determine the annual holding cost andthe annual setup cost.b Let qi* be the number of units of product i producedduring each cycle. Determine the optimal value of N(call it N*) and qi*. c Let EROQi be the optimal production run size forproduct i if…
each company sinks wells of the same size at the same time. If both companies sink wide wells, each will extract 2 million barrels in 6 months, but each company will receive profit of only GHC 1 million. On the other if each company sinks a narrow well, it will take a year for Clampett and TEXplor to extract their respective shares, but their profits will be GHC14 million apiece. Finally, if one company drills a wide well while the other company drills a narrow well, the first company will extract 3 million barrels and the second company will extract only 1 million barrels. In this case, the first company will earn profits of GHC 16 million and the second company will actually lose GHC 1million.1. Illustrate this using a normal form game. 2. Does either firm have a strictly dominant strategy? If yes, what is (are) these strategies? Explain your answer. 3. What strategy will each firm adopt? Explain your answer. 4. Does this game have a Nash equilibrium? Explain your answer5. Is…

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The profit from each product is that sambal x costs IDR 1,500/pack, sambal y IDR. 2,500/pack, and sambal z IDR 900/pack. Determine what is the optimum. production so that all resources are properly absorbed and get maximum profit!