Concept explainers
a)
To track: The values in the decision variable cells and the objective cell when the selling price for basics vary from $220 to $350 in increments of $10.
Introduction: In linear programming, the unbounded solution would occur when the objective function is infinite. If no solution satisfied the constraints then it is said to be an unfeasible solution.
b)
To track: The values in the decision variable cells and the objective cell when the labor cost per hour for assembling vary from $5 to $20 in increments of $1.
Introduction: In linear programming, the unbounded solution would occur when the objective function is infinite. If no solution satisfied the constraints then it is said to be an unfeasible solution.
c)
To track: The values in the decision variable cells and the objective cell when the labor hours for testing vary from 0.5 to 3.0 in increments of 0.5.
Introduction: In linear programming, the unbounded solution would occur when the objective function is infinite. If no solution satisfied the constraints then it is said to be an unfeasible solution.
d)
To track: The values in the decision variable cells and the objective cell when the labor hours for assembling and testing an XP vary independently.
Introduction: In linear programming, the unbounded solution would occur when the objective function is infinite. If no solution satisfied the constraints then it is said to be an unfeasible solution.
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Chapter 3 Solutions
Practical Management Science
- Cindy and Mindy were in the same student group while studying for their MBA atUTD. They graduated together but started working as inventory managers in different but competingretailers selling air conditioners in Dallas. While in school, they learned only the economic orderquantity model for finding the optimal order sizes. Now they are both purchasing air conditionersfrom Trane to sell at their stores. Cindy knows that the order setup cost with Trane is $200 and theannual inventory holding cost is $400. Cindy expects that Mindy has the same cost figures. Cindyhas accidentally learned that Mindy is ordering 10 air conditions every time she orders. Show howCindy can use this information to deduce the demand Mindy faces. Explain why would competitorsway want to know each other’s demandarrow_forwardRocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?arrow_forwardA local finance company quotes a 16 percent interest rate onone-year loans. So, if you borrow $26,000, the interest for the year will be $4,160. Because you must repay a total of $30,160 in one year, the finance company requiresyou to pay $30,160y12, or $2,513.33, per month over the next 12 months. Is this a15 percent loan? What rate would legally have to be quoted? What is the effectiveannual rate?arrow_forward
- Use dynamic programming to solve 0-1 knapsack problem in which the knapsack can hold up to 13kg with the following items: Item Weight (kg) Value 1 3 12 2 5 25 3 7 50arrow_forwardA company faces an annual demand for 80,000 silk shirts. The holding cost is $1.60 per shirt & year, & the cost of placing one order is $1,000. In which one shirt costs $20. Suppose that our supplier offers a 1% discount if we were to order at least 30,000 shirts. Assuming that the holding costs are 8% of the purchase price, should we take this offer?arrow_forwardAmazon sells X units (X= 2017056) of consumerelectronics from Samsung every year. Each unit costs $120 and Amazon hasa holding cost of 20 percent. The fixed clerical and transportation cost foreach order Amazon places with Samsung is $4,000. What is the optimal sizeof the order that Amazon should place with Samsung? What is the totalannual cost incurred by Amazon for optimal lot size. With the goal ofreducing inventories, Amazon would like to reduce the size of each order itplaces with Samsung to 2,000 units .How much should it reduce the fixed costper order for an order of 2,000 units to be optimal?arrow_forward
- 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.arrow_forwardIn 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.)arrow_forwardA hospital orders its thermometers from a hospitalsupply firm. The cost per thermometer depends on the ordersize q, as shown in Table 6. The annual holding cost is 25%of the purchasing cost. Let EOQ80 be the EOQ if the costper thermometer is 80¢, and let EOQ79 be the EOQ if thecost per thermometer is 79¢.a Explain why EOQ79 will be larger than EOQ80. b Explain why the optimal order quantity must be ei-ther EOQ79, EOQ80, or 100. c If EOQ80 100, show that the optimal order quan-tity must be EOQ79. d If EOQ80 100 and EOQ79 100, show that theoptimal order quantity must be either EOQ80 or 100.e If EOQ80 100 and EOQ79 100, show that the optimal order quantity must be EOQ79.arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,