Concept explainers
a)
To determine: The way to minimize the annual cost of producing the cars.
Introduction: The variation between the present value of the
b)
To determine: The change in demand using SolverTable.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
c)
To determine: The effect of change on optimal solution using SolverTable.
Introduction: The variation between the present value of the cash outflows and the present value of the cash inflows are known as the Net Present Value (NPV).
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Chapter 6 Solutions
Practical Management Science, Loose-leaf Version
- 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?arrow_forwardHeller Manufacturing has two production facilities that manufacture baseball gloves. Production costs at the two facilities differ because of varying labor rates, local property taxes, type of equipment, capacity, and so on. The Dayton plant has weekly costs that can be expressed as a function of the number of gloves produced TCD(X) = x2 - X + 3 where X is the weekly production volume in thousands of units and TCD(X) is the cost in thousands of dollars. The Hamilton plant's weekly production costs are given by TCH(Y) = y2 + 2Y + 2 where Y is the weekly production volume in thousands of units and TCH(Y) is the cost in thousands of dollars. Heller Manufacturing would like to produce 5,000 gloves per week at the lowest possible cost. (a) Formulate a mathematical model that can be used to determine the optimal number of gloves to produce each week at each facility. min s.t. = 5 X, Y 2 0 (b) Use Excel Solver or LINGO to find the solution to your mathematical model to determine the optimal…arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,