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Concept explainers
a)
To determine: The inexpensive way of producing today’s batch of the drug.
Linear programming:
It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
b)
To use: The solver table to see the way the percentage of requirement A is really costing Company NA.
Linear programming:
It is a mathematical modeling procedure where a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
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Chapter 4 Solutions
Practical Management Science, Loose-leaf Version
- Suppose that GLC earns a 2000 profit each time a person buys a car. We want to determine how the expected profit earned from a customer depends on the quality of GLCs cars. We assume a typical customer will purchase 10 cars during her lifetime. She will purchase a car now (year 1) and then purchase a car every five yearsduring year 6, year 11, and so on. For simplicity, we assume that Hundo is GLCs only competitor. We also assume that if the consumer is satisfied with the car she purchases, she will buy her next car from the same company, but if she is not satisfied, she will buy her next car from the other company. Hundo produces cars that satisfy 80% of its customers. Currently, GLC produces cars that also satisfy 80% of its customers. Consider a customer whose first car is a GLC car. If profits are discounted at 10% annually, use simulation to estimate the value of this customer to GLC. Also estimate the value of a customer to GLC if it can raise its customer satisfaction rating to 85%, to 90%, or to 95%. You can interpret the satisfaction value as the probability that a customer will not switch companies.arrow_forwardClippers Inc. (CI) manufactures two types of garden clippers. A light-duty model, called the “half-inch,”is intended for clipping branches and stems up to one-half inch thick. The “one-inch” model is designedfor heavier stems and branches. To boost sales, CI decided at the beginning of the current year to reducethe price of the half-inch model to better position its price relative to some key competitors. On the otherhand, CI felt that the one-inch model was technically superior to competitors’ models and decided that asmall price increase was appropriate. The data for the current and prior year are as follows:Current Year Prior YearSales units 7,200 6,500Sales mix for each productHalf-inch model 50% 30%One-inch model 50% 70%PriceHalf-inch model $12.00 $14.00One-inch model $36.00 $32.00Variable cost per unitHalf-inch model $6.00 $6.00One-inch model $8.00 $8.00Fixed cost $35,000 $35,000Required1. Prepare a comparative contribution income statement for CI for the current year that shows…arrow_forwardRajan wanted a radio from Jacky's. It appears that Rajan is particularly interested in purchasing a Radio from the inexpensive retailer's sales manager for consumer electronics. He tells Jacky, the salesperson at the inexpensive store where he thinks he'll get the best deal, that his old radio died and he wants to listen to his favourite tunes. He wants a replacement radio as quickly as possible. In three and a half weeks, Rajan's favourite model will be 10% off.He suspects Rajan won't wait and will find another job. Jacky will earn less on the lowered price. He thinks that telling Rajan of the sale makes little sense.When Jacky tells Rajan that the radio set he wants is no longer available and won't be for another week, Rajan is enraged. Fearing losing the business, Jacky begs his sales manager, Michelle, to speed up delivery. Michelle says it's impossible and suggests Jacky tell Rajan the store can get the set in 24 hours and sell him the demo model. Michelle says the sample is new…arrow_forward
- A mixture of pellets is to be made containing x regular pellets, y large pellets and z extra large pellets. Cost, weight and volume data for each type of pellet are shown in the table. Is it possible to make mixture of 55 pellets at a cost of $0.85 if the mixture is to have 120 weight units and 130 volume units? If so, how many each type of pellet should be in the mixture? Pellet Type 5. Number of Cost per Pellet in Cents Weight Units per Pellet Volume Pellets Units per Pellet Regular Large Extra large 2 1 4 y 1 4 3arrow_forwardA company manufactures two types of products. Each product type needs a turning process at the lathe and a milling process at the milling machine. If the lathe is used for type 1 products only, it can process 500 units in a day. If the lathe is used for type 2 products only, it can process 300 units in a day. If the milling machine is used for type 1 products only, it can proces 900 units in a day. If the milling machine is used for type 2 products only, it can process 450 units in a day. The unit profits for product types 1 and 2 are $50 and $75, respectively. Formulate an LP that will maximize the company's daily profit. (a) Decision variables? (b) Objective and objective function? (c) Constraints?arrow_forwardA political party is planning a ninety-minute television show. The show will have at least 9 minutes of direct requests for money from viewers. Three of the party's politicians will be on the show- a senator, a congresswoman, and a governor. The senator, a party "elder statesman," demands that he be on screen for at least twice as long as the governor. The total time taken by the senator and the governor must be at least twice the time taken by the congresswoman. Based on a pre-show survey, it is believed that 37, 41, and 45 (in thousands) viewers will watch the program for each minute the senator, congresswoman, and governor, respectively, are on the air. Find the time that should be allotted to each politician in order to get the maximum number of viewers. Find the maximum number of viewers. The quantity to be maximized, z, is the number of viewers in thousands. Let x, be the total number of minutes allotted to the senator, × be the total number of minutes allotted to the…arrow_forward
- A political party is planning a half-hour television show. The show will have at least 3 minutos of direct requests for money from viowers Three of the party's politicians will be on the show-a senator, a congresswoman, and a governor The senator, a party "elder statesman," demands that he be on screen for at least twice as long as the governor The total time taken by the senator and the governor must be at least twice the time taken y the congresswoman Based on a pre-show survey, it is believed that 33, 38, and 43 (in thousands) viewers will watch the program for each minute the senator, congresswoman, and governor, respectively, are on the air. Find the time that should be allotted to each politician in order to get the maximum number of viewers Find the maximum number of viewers The quantity to be maximized, z, is the number of viewers in thousands. Let x, be the total number of minutes allotted to the senator, x, be the total number of minutes allottod to the congresswoman, and x,…arrow_forward) Creative Sports Design (CSD) manufactures a standard-size racket and an oversize racket.The firm’s rackets are extremely light due to the use of a magnesium-graphite alloy that wasinvented by the firm’s founder. Each standard-size racket uses 0.125 kilograms of the alloy andeach oversize racket uses 0.4 kilograms; over the next two-week production period only 80kilograms of the alloy are available. Each standard-size racket uses 10 minutes of manufacturingtime and each oversize racket uses 12 minutes. The profit contributions are $10 for eachstandard-size racket and $15 for each oversize racket, and 40 hours of manufacturing time areavailable each week. Management specified that at least 20% of the total production must be thestandard-size racket. How many rackets of each type should CSD manufacture over the next twoweeks to maximize the total profit contribution? Assume that because of the unique nature oftheir products, CSD can sell as many rackets as they can produce.arrow_forwardFreezco, Inc., sells refrigerators. The company has issued a warranty on all refrigerators that requires free replacementof any refrigerator that fails before it is three years old. We are given the following information: (1) 3% of all new refrigeratorsfail during their first year of operation; (2) 5% of all one-year-old refrigerators fail during their second year of operation; and(3) 7% of all two-year-old refrigerators fail during their third year of operation. A replacement refrigerator is not covered bythe warranty.a Use Markov chain theory to predict the fraction of all refrigerators that Freezco will have to replace.b Suppose that it costs Freezco $500 to replace a refrigerator and that Freezco sells 10,000 refrigerators per year. If thecompany reduced the warranty period to two years, how much money in replacement costs would be saved?arrow_forward
- Saneguard is a large bottling company. Saneguard’s Board of Directors has seven members. Each director is elected based on aptitude, knowledge, experience and leadership criteria. All Board members and their representatives attend meetings. Four of these members and their corresponding alternates are independent. The Chairman of the Board, also independent, represents the minority shareholders. At Saneguard, the positions of CEO and Chairman of the Board are filled by different individuals. Saneguard's external auditors reports to the Board of Directors and the Audit Committee, while the chief of internal audit reports to the CEO and Audit Committee. Which of the following is not true according to the international code of corporate governance? The role of chairman and chief executive officer should not be separated. The positions of CEO and Chairman of the Board in Saneguard are filled by different individuals. The Audit committee should review and monitor…arrow_forwardGotham City has 10,000 streetlights. City investigatorshave determined that at any given time, an average of 1,000lights are burned out. A streetlight burns out after an averageof 100 days of use. The city has hired Mafia, Inc., to replaceburned-out lamps. Mafia, Inc.’s contract states that thecompany is supposed to replace a burned-out street lamp inan average of 7 days. Do you think that Mafia, Inc. is livingup to the contract?arrow_forwardCompany XYZ is specialized in producing and selling smart watches. The company currently has two products and is planning to improve it profits in the coming years. The company is thinking of introducing a sales commission to encourage its sales people to make more sales and improve company's profitability. When designing the sales commission the company should base the sales commission on: O a. None of the given answers O b. The selling price O c. The color of the product d. The contribution margin O e. The number of employees 14:02 W A a d0) ENG 15-04-2021 re to search hp prt sc end pg up delete home 40 96 & num 2$ backspace lock 3 6. 8. V. 8 A E R U home to 4 į 5 0 enter D G J K L. pause 1 shift 2 C end alt ctrl insarrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
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