menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is $100, $90, $50, or $10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of $200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration: Policy 1: Never replace a machine. Policy 2: Immediately replace a bad machine. Policy 3: Immediately replace a bad or average machine. Policy 4: Immediately replace a bad, average, or good machine. Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.

BuyFindarrow_forward

Practical Management Science

6th Edition
WINSTON + 1 other
Publisher: Cengage,
ISBN: 9781337406659

Solutions

Chapter
Section
BuyFindarrow_forward

Practical Management Science

6th Edition
WINSTON + 1 other
Publisher: Cengage,
ISBN: 9781337406659
Chapter 10, Problem 41P
Textbook Problem
10 views

At the beginning of each week, a machine is in one of four conditions: 1 = excellent; 2 = good; 3 = average; 4 = bad. The weekly revenue earned by a machine in state 1, 2, 3, or 4 is $100, $90, $50, or $10, respectively. After observing the condition of the machine at the beginning of the week, the company has the option, for a cost of $200, of instantaneously replacing the machine with an excellent machine. The quality of the machine deteriorates over time, as shown in the file P10 41.xlsx. Four maintenance policies are under consideration:

  • Policy 1: Never replace a machine.
  • Policy 2: Immediately replace a bad machine.
  • Policy 3: Immediately replace a bad or average machine.
  • Policy 4: Immediately replace a bad, average, or good machine.

Simulate each of these policies for 50 weeks (using at least 250 iterations each) to determine the policy that maximizes expected weekly profit. Assume that the machine at the beginning of week 1 is excellent.

Summary Introduction

To determine: The policy that maximizes the expected weekly profit by simulating policy 1.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

Explanation of Solution

Formulae to determine the above table:

Summary Introduction

To determine: The policy that maximizes the expected weekly profit by simulating policy 2.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

Summary Introduction

To determine: The policy that maximizes the expected weekly profit by simulating policy 3.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

Summary Introduction

To determine: The policy that maximizes the expected weekly profit by simulating policy 4.

Introduction: Simulation model is the digital prototype of the physical model that helps to forecast the performance of the system or model in the real world.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 10 Solutions

Practical Management Science
Show all chapter solutions
add
Ch. 10.4 - In the Walton Bookstore example, suppose that...Ch. 10.4 - A sweatshirt supplier is trying to decide how many...Ch. 10.4 - In the Walton Bookstore example with a discrete...Ch. 10.5 - If you add several normally distributed random...Ch. 10.5 - In Problem 11 from the previous section, we stated...Ch. 10.5 - Continuing the previous problem, assume, as in...Ch. 10.5 - In Problem 12 of the previous section, suppose...Ch. 10.5 - Use @RISK to analyze the sweatshirt situation in...Ch. 10.5 - Although the normal distribution is a reasonable...Ch. 10.6 - When you use @RISKs correlation feature to...Ch. 10.6 - When you use @RISKs correlation feature to...Ch. 10.6 - Repeat Problem 23, but now make the second input...Ch. 10.6 - The Business School at State University currently...Ch. 10 - Six months before its annual convention, the...Ch. 10 - You have made it to the final round of the show...Ch. 10 - A new edition of a very popular textbook will be...Ch. 10 - A hardware company sells a lot of low-cost,...Ch. 10 - W. L. Brown, a direct marketer of womens clothing,...Ch. 10 - Assume that all of a companys job applicants must...Ch. 10 - Lemingtons is trying to determine how many Jean...Ch. 10 - Dilberts Department Store is trying to determine...Ch. 10 - It is surprising (but true) that if 23 people are...Ch. 10 - A Flexible Savings Account (FSA) plan allows you...Ch. 10 - At the beginning of each week, a machine is in one...Ch. 10 - Simulation can be used to illustrate a number of...Ch. 10 - In statistics we often use observed data to test a...Ch. 10 - You are making several runs of a simulation model,...Ch. 10 - If you want to replicate the results of a...Ch. 10 - Suppose you simulate a gambling situation where...Ch. 10 - You plan to simulate a portfolio of investments...Ch. 10 - Big Hit Video must determine how many copies of a...Ch. 10 - Many people who are involved in a small auto...Ch. 10 - A building contains 1000 lightbulbs. Each bulb...Ch. 10 - Why is the RISKCORRMAT function necessary? How...Ch. 10 - Consider the claim that normally distributed...Ch. 10 - It is very possible that when you use a...Ch. 10 - When you use a RISKSIMTABLE function for a...Ch. 10 - Consider a situation where there is a cost that is...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What is an overhead consumption ratio?

Managerial Accounting: The Cornerstone of Business Decision-Making

How are direct-mail and e-mail sales messages similar, and how are they different?

Essentials of Business Communication (MindTap Course List)

VALUATION OF A DECLINING GROWTH STOCK Martell Mining Companys ore reserves are being depleted, so its sales are...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is inflation and what causes it?

Essentials of Economics (MindTap Course List)

Explain why an economys income must equal its expenditure.

Principles of Macroeconomics (MindTap Course List)