Q&A Hero

Q: Which of the following is a reason for product failure in a firm? A. Resorting to radical innovation with the new products process B. Avoiding the use of the readyfireaim approach in the product development process C. Chasing a moving target D. Paying too much attention to customer needs

Q: Which of the following statements is true of the importance of new products? A. The failure rate for new products is estimated to be around 90 percent. B. The new products process is exceedingly difficult. C. Radical innovation is detrimental to the survival of a firm. D. All the individuals involved in the creation of a new product generally belong to the same department.

Q: Well-known business writer, Gary Hamel, has described _____ as "the most important business issue of our time." A. product distribution B. the creation of radical innovation C. advertising and marketing of services D. product line extensions

Q: In a new product process, an evaluation task that includes conditional "Go" decisions is sometimes called a fuzzy gate.

Q: Research has shown that at least 40 percent of firms assign a marketing manager whose job it is to manage the phased new products process.

Q: Product portfolio management refers to the procedure that takes a new product idea through concept evaluation, product development, launch, and post-launch.

Q: The terms "product idea," "product concept," and "product prototype" are interchangeable and they are all about the same thing.

Q: The number one reason for new product success is a unique superior product.

Q: New-to-the-world products are less likely to require consumer learning.

Q: New-to-the-firm products revolutionize existing product categories or define wholly new ones.

Q: The term "product innovation" usually applies to functions, especially those of manufacturing or distribution.

Q: An ideal new products team is essentially self-directed with limited or no cross-functionality.

Q: Firms with a global innovation culture have the most effective global new product programs.

Q: A firm's global presence is no guarantee that it will automatically know how to efficiently manage its global operations.

Q: Business firms expect, and get, a high percentage of their sales and profits from new products.

Q: Radical innovation that displaces or obsoletes current products and creates totally new product categories is critical to the future growth and survival of a firm.

Q: New products can be tangible goods or services.

Q: By definition, new products are limited to significant technological innovations.

Q: Keith Monroe is deciding among four alternatives and fleshes out the decision tree shown below. He has developed excellent estimates of payoffs but admits he has no clue about the probabilities for the two states of nature. He wants to cover all of his bases, so he would like to calculate the probability of high demand for which each alternative is superior. Analyze this situation and make recommendations for him. He promises to cut you in for 30% of the profits if you can show him how to calculate the ranges.

Q: The Hill O'Beans Coffee Company operates a chain of coffee shops downtown and has decided to open a new store. The demand will be weak, fair, or strong; probabilities are 0.25, 0.30, and 0.45, respectively. If the company installs a small booth that sells only coffee, the associated payoffs are -$25,000; 25,000; and $100,000 for weak, fair, and strong demand. If the company chooses an expanded facility that offers sandwiches and breakfast foods, it must build a kitchen and rent additional space. The payoffs for an expanded facility are -$200,000, -$25,000, and $500,000. a. Draw a decision tree for this problem. b. What should management do to achieve the highest expected payoff?

Q: A new minor league baseball team is coming to town and the owners have decided to build a new stadium, either small or large. The success of the team with regard to ticket sales will be either high or low with probabilities of 0.75 and 0.25, respectively. If demand for tickets is high, the large stadium would provide a payoff of approximately $20 million. If ticket sales are low, the loss on the large stadium would be $5 million. If a small stadium is constructed, and ticket sales are low, the payoff is $500,000 after deducting the cost of construction. If ticket sales are high, the team can choose to build an upper deck, or to maintain the existing facility. Expanding the stadium in this scenario has a payoff of $10 million, whereas maintaining the same number of seats has a payoff of only $3 million. a. Draw a decision tree for this problem. b. What should management do to achieve the highest expected payoff?

Q: A company that is introducing a new product has to choose between four marketing plans, A through D. The marketing plans are forecasted to have varying payoffs, depending on the level of advertising. The probability of high demand is 0.6 and of low demand 0.4. Use the following decision rules to select the marketing plan: maximin, maximax, minimax regret, Laplace, and expected value.

Q: A company is screening ideas for new services. Four alternative service ideas are being considered. Management identified four criteria and weighted them as follows: A = 40, B = 30, C = 20, and D = 10. They have also come up with scored values for the five alternatives and the four criteria as shown below. Management has decided that if an alternative has less than a total scored value of 600, it should automatically be rejected. Use the preference matrix technique to determine which idea should be accepted.

Q: A manufacturing firm is considering whether to produce or outsource the production of a new product. If they produce the item themselves, they will incur a fixed cost of $950,000 per year, but if they outsource overseas there will be a $1.5 million cost per year. The advantage of outsourcing overseas is the variable cost of 95 per unit, which is a fraction of their $43/unit cost in their own union shop. Regardless of where these devices are made, they will sell for $98 each. What is the break-even quantity for each alternative? Solve this problem graphically and algebraically.

Q: A manufacturing firm is considering an entirely new product that will require additional capital equipment, training, and an addition to their existing facility that will cost $50,000 per year. The projected retail price is $45 per unit, and the variable cost of production is $12.50. What is the break-even for this product? Solve using both the graphical and algebraic approaches.

Q: A single factory produces two different products during each half of the year with equivalent fixed cost; from January through June they produce Product A and from July through December they produce Product B. Product A costs twice as much to produce and is sold at twice the price of Product B. Derive an expression relating the break-even quantity of Product A to that of Product B.

Q: Consider this list of jobs that have just arrived and are ready for processing. They all require processing first on machine 1 and then on machine 2. Both machines are now idle. Develop a schedule that minimizes makespan and calculate this makespan time. Now assume that each job can be split into two jobs, each having half the duration on both machine 1 and machine 2. Using the original sequence that minimized average flow time, calculate the flow times for all split jobs What is the effect of this new schedule on the average flow time for these split jobs? Job Machine 1 Machine 2 1 14 6 2 11 12 3 16 14 4 12 8 5 22 9 6 13 15 7 10 12 8 8 13

Q: Lee Beedo, a hip bachelor in Edmond, has a date for Saturday night and finds himself without a thing to wear. Faced with the daunting task of doing enough laundry to fully accessorize during his night out, Lee has sorted his clothes into loads according to fabric and color. Based on his vast experience doing laundry, Lee knows how long each load will take in both the washer and the dryer. He glances at his watch; it is now 2:00 p.m. and he has to have the last load dry by 8:30 p.m. to be there in time. Help Lee develop a schedule that will enable him to make his date on time and depict that schedule using a Gantt chart. Can he make it and, if so, by how much? Load Wash Time (hrs.) Dry Time (hrs.) Polyesters 0.50 0.75 Leathers 2.00 1.50 Whites 0.75 1.25 Unmentionables 1.00 1.25 Silks 0.50 0.25

Q: Consider the following problems in which four jobs must each be processed on two machines starting with Machine A and then going to Machine B. The following processing times are available (in hours): Job Processing Time Machine A Processing Time Machine B A 1 5 B 8 2 C 3 9 D 7 7 What is the minimum makespan for this group of jobs? Depict it graphically using a Gantt chart.

Q: Use the information in the table and sequence the six jobs using SPT and EDD. Calculate the average flow times and average lateness. All jobs arrived at time zero and are ready at time zero. Job Production Time Due Date A 10 20 B 15 25 C 17 22 D 20 31 E 16 20 F 20 24

Q: A workstation has five jobs that just arrived (the start of Day 1) to be processed, as shown in the following table. Use this information to sequence the five jobs using FCFS, SPT, EDD, S/RO, and CR. Calculate the average flow times, average early times, and average past due. Job Processing Time at Workstation (hours) Time Remaining to Due Date (weeks) Work Time Remaining Including Workstation (weeks) Remaining Number of Operations A 5 30 10 2 B 2 10 5 1 C 9 12 5 3 D 16 25 20 2 E 12 45 22 4

Q: Two contract labor companies are competing for work being outsourced by Febrero SpA. One contractor, Terza, has a learning rate governed by a tripling of output at a 90% rate and the other contractor, Segundo, has a learning rate governed by the conventional doubling of output at a 90% rate. Both Terza and Segundo take 20 minutes to complete the first unit they are given for bid estimation purposes. How many more units must Terza make than Segundo before their time per unit drops below 15 minutes? [Note: a calculator is required to answer this question.]

Q: The estimated time to produce the first unit is 100 hours. If a 90 percent learning rate is applicable, what is the estimated time of producing the first ten units? Refer to the copy of Table I.1 appended to this exam.

Q: The Dean's office is interested in determining the percentage of students receiving A's in their study tour classes. The results of three classes are summarized in this table: Observation Period A Grade Other Grade Observations Monday 26 3 23 Tuesday 25 0 25 Wednesday 15 1 16 Total 66 4 70 The Assistant Dean wants a 98 percent confidence level and a degree of precision of + 0.04. How many more observations are needed?

Q: An undergraduate business student studies diligently in the library during dead week in anticipation of an outstanding performance on her final exams. She asks a friend to spy on her at random intervals to determine what percentage of time she is actually studying. Over the course of three days, her friend records the following observations: Observation Period Times Studying Times Not Studying Observations Monday 20 3 23 Tuesday 21 4 25 Wednesday 10 1 11 Total 51 8 59 If the student wants a 95 percent confidence level (z = 1.96) and a degree of precision of + 0.08, how many more observations are needed?

Q: A pilot work study has been conducted on a new operation with four work elements. The following times, in seconds, were obtained using the continuous method. a. What is the normal time for this operation? b. If an allowance of 20 percent is used, what is the standard time for this task? c. What sample size is appropriate for estimating the time for element 3 within + 3 percent of the true mean time with 95 percent confidence (z = 1.96)?

Q: A single-sampling plan by attributes is needed for a purchased component. Table G.1 is appended to this exam. Sample size = 80 Acceptance number (c) = 1 Acceptance quality level (AQL) = 0.02 Lot tolerance proportion defective (LTPD) = 0.06 Given the preceding information draw the AOQ curve and determine the AOQL.

Q: This OC curve represents a single sampling plan conducted on a lot size of 200 with a sample size of 20 and an acceptance number of 1. The y-coordinates of the first few points have been labeled; the x coordinates appear on the x-axis. If the receiving company uses rectified inspection, what is the greatest fraction defective that will enter their production process?

Q: A single-sampling plan by attributes is needed for a purchased component. Table G.1 is appended to this exam. Sample size = 100 Acceptance number (c) = 2 Acceptance quality level (AQL) = 0.01 Lot tolerance proportion defective (LTPD) = 0.04 Given the preceding information:

Q: A single-sampling plan by attributes is needed for a purchased component. Table G.1 is appended to this exam. Sample size = 80 Acceptance number (c) = 1 Acceptance quality level (AQL) = 0.02 Lot tolerance proportion defective (LTPD) = 0.06 Given the preceding information, draw the OC curve for this plan.

Q: Jake buys a new work truck every four years regardless of the condition of his current vehicle. His next truck will cost $45,000 and Jake estimates it will have a salvage value of $20,000 when it's time to buy a replacement. What is the annual depreciation?

Q: Acapella University offers to lock-in a student's tuition for a four year period. If tuition is $30,000 per year (payable at the end of each year) and the interest rate is currently 8%, what amount of money now would enable you to withdraw the $30,000 figure at the end of each of the next four years?

Q: Nathan would have to wait until he was 35 to receive his inheritance, which was entirely too long in light of his impressive shopping list. He had almost given up hope when he saw an interesting offer one afternoon while watching television. In the advertisement, a company expressed a willingness to give him cash now if he would sign over his inheritance 11 years from now. If they use a 15% interest rate, what percentage of his inheritance will Nathan receive today?

Q: Refer to the bank process model. The bank's process improvement group has developed a number of process and technology changes that will improve the Teller's process rate per customer from a mean of 3.0 minutes to 2.5 minutes (standard deviation remains at 0.5 minutes). The Bank Manager wants to determine if the improved process rate, along with the special promotion for new customers, will allow the "arrive and immediately leave" rate and average customer wait time in line achieved to still be met (12% balk rate, 9.95 minutes in line). If so, the manager will implement the process and technology changes and allow the special promotion to proceed. Using SimQuick, estimate the new arrive and immediately leave rate and average time in line. What decision should the manager make?

Q: Refer to the bank process model. The Marketing Department for the bank has decided to run a special promotion for new customers that will increase the number of customers arriving at the bank. The new arrival rate is expected to be an average time between arrivals of 2.0 minutes instead of the current average time between arrivals of 2.5 minutes. With the potential increase in business, the bank manager is concerned about the number of customers who will arrive and leave because the line is full (with 6 customers) and the average wait time in line at the bank. All other parameters of the model remain the same. Using SimQuick, estimate the new arrive and immediately leave rate and average time in line. Should the manager be concerned?

Q: SimQuick is to be used to simulate the following bank process: Customers arrive at the Entrance Door of the bank with an average time between arrivals of 2.5 minutes. The Line Buffer holds 6 customers. If a customer arrives and the buffer line is filled, the customer leaves. The Work Station Teller's processing time per customer is normally distributed, with a mean of 3.0 minutes and a standard deviation of 0.5 minutes. The Served Customer Buffer in the flowchart is used to count the number of customers processed during the simulation period. A 2-hour period is to be simulated and the simulation should be repeated 30 times. Determine: a) The number of customers served during the 2-hour period; b) The percentage of customers who arrived at the bank and left because the buffer line was full; c) The utilization of the teller (% of time working) during the 2-hour period;

Q: What is degeneracy in the context of linear programming? Why is degeneracy a concern?

Q: The Really Big Shoe Company is a manufacturer of basketball shoes and football shoes. Ed Sullivan, the manager of marketing, must decide the best way to spend advertising resources. Each football team sponsored requires 120 pairs of shoes. Each basketball team requires 32 pairs of shoes. Football coaches receive $300,000 for shoe sponsorship and basketball coaches receive $1,000,000. Ed's promotional budget is $30,000,000. The Really Big Shoe Company has a very limited supply (4 liters or 4,000cc) of flubber, a rare and costly raw material used only in promotional athletic shoes. Each pair of basketball shoes requires 3cc of flubber, and each pair of football shoes requires 1cc of flubber. Ed desires to sponsor as many basketball and football teams as resources allow. However, he has already committed to sponsoring 19 football teams and wants to keep his promises. a. Give a linear programming formulation for Ed. Make the variable definitions and constraints line up with the computer output appended to this exam. b. Solve the problem graphically, showing constraints, feasible region, and isoprofit lines. Circle the optimal solution, making sure that the isoprofit lines drawn make clear why you chose this point. (Show all your calculations for plotting the constraints and isoprofit line on the left to get credit.) c. Solve algebraically for the corner point on the feasible region. d. Part of Ed's computer output is shown following. Give a full explanation of the meaning of the three numbers listed below. Based on your graphical and algebraic analysis, explain why these numbers make sense. (Hint: He formulated the budget constraint in terms of $000.) See the computer printout that follows. First Number: The shadow price of 0.0104 for the "Flubber" constraint. Second Number: The slack or surplus of 6383.334 for the "Budget" constraint. Third Number: The lower limit of 12.2807 for the "Commitment" constraint.

Q: The CZ Jewelry Company produces two products: (1) engagement rings and (2) jeweled watches. The production process for each is similar in that both require a certain number of hours of diamond work and a certain number of labor hours in the gold department. Each ring takes four hours of diamond work and two hours in the gold shop. Each watch requires three hours in diamonds and one hour in the gold department. There are 240 hours of diamond labor available and 100 hours of gold department time available for the next month. Each engagement ring sold yields a profit of $9; each watch produced may be sold for a $10 profit. a. Give a complete formulation of this problem, including a careful definition of your decision variables. Let the first decision variable, (X1), deal with rings, the second decision variable, (X2), with watches, the first constraint with diamonds, and the second constraint with gold. b. Graph the problem fully in the following space. Label the axes carefully, plot the constraints, shade the feasibility region, plot at least one isoprofit line that reveals the optimal solution, circle the corner points and highlight the optimal corner point so found, and solve for it algebraically. (Show all your work to get credit.)

Q: Use the graphical technique to find the optimal solution for this objective function and associated constraints. Maximize: Z = 8A + 5B Subject To: Constraint 1 4A + 5B < 80 Constraint 2 7A + 4B < 120 A, B > 0 Graph the problem fully in the following space. Label the axes carefully, plot the constraints, shade the feasibility region, identify all candidate corner points, and indicate which one yields the optimal answer.

Q: As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 679 units. Ordering costs are $7 each time an order is placed, and the holding cost is 10% of the unit cost. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 100 $5.65 101 - 350 $4.95 351 or more $4.55 What ordering-quantity policy do you recommend?

Q: As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 1,000 units. Ordering costs are $50 each time an order is placed, and the holding cost is 25 percent of the per-unit price. Your supplier provided the following price schedule. Quantity Price per Unit 1 - 199 $10.00 200 - 499 $ 9.80 500 or more $ 9.60 What ordering-quantity policy do you recommend?

Q: A production manager uses the economic lot size approach to determine the batch size for a product with an annual demand of 20,000 units per year. The setup cost for each batch is $50 and once the setup is complete, the product may be produced at the rate of 800 units per day. There is a holding cost of $2 per unit per year and the plant operates on a 250-day production year. If the machine used to produce this product is needed for another item and it takes one day to set up regardless of product, how many production days are available for production of the new item?

Q: Walter White must satisfy an annual demand of 50,000 pounds per year. The setup cost for each batch is $6,500 and once the setup is complete, the product may be produced at the rate of 1,800 pounds per day. There is a holding cost of $15 per unit per year and the plant operates on a 350-day production year. Determine the relevant parameters and sketch the inventory cycle through two complete cycles, labeling all lines and vertices.

Q: Walter White must satisfy an annual demand of 50,000 pounds per year. The setup cost for each batch is $6,500 and once the setup is complete, the product may be produced at the rate of 1800 pounds per day. There is a holding cost of $15 per unit per year and the plant operates on a 350-day production year. How big should the production batch be and how long (in days) will it take to produce the batch?

Q: A production manager is making a decision on batch size for a product with an annual demand of 25,000 units per year. The setup cost for each batch is $45 and once the setup is complete, the product may be produced at the rate of 650 units per day. There is a holding cost of $2 per unit per year and the plant operates on a 250-day production year. How big should the production batch be and how long (in days) will it take to produce the batch?

Q: Sketch the economic production lot size (ELS) graph of inventory level as a function of time and label all elements of the graph.

Q: A newsstand is trying to determine how many bundles of newspapers to stock. For each bundle, the newsstand makes $20. However, they lose $5 per bundle if they do not sell. The following discrete probability distribution has been estimated for their daily demand. How many bundles should they stock? Demand (bundles) Probability 4 .10 5 .20 6 .30 7 .30 8 .10

Q: The delivery wagon that the hominy man had used for the last three decades was beyond repair, so he decided to open a hominy stand at a busy intersection in downtown Luther. Customers arrive at the rate of 8 per hour and it takes 5 minutes on average to fill their buckets with hominy. a. What is the likelihood that the line is longer than three people? b. What is the average waiting time in line? c. What is the average number of customers in line?

Q: A professor's teaching assistants sit in their communal office and answer questions from students the afternoon before the final exam. The class is a mass lecture of 350 students, and the teaching assistants have final exams of their own, so they concentrate on providing explanations as quickly as possible. On average, the three teaching assistants can answer 30 questions an hour and students arrive at their office every five minutes. Student arrivals are Poisson distributed, each student has only one question and answer times are exponentially distributed. a. What fraction of their time do the teaching assistants spend answering questions? b. What is the average number of students waiting outside their office? c. What is the average time a student spends in line outside the teaching assistants' office and having their question answered?

Q: A harvesting firm has six combines, each requiring service at an average rate of once every 40 hours, according to an exponential distribution. The firm has a mechanic who needs four hours to complete the average repair with exponential service times. a. What is the average utilization of the mechanic? b. What is the average number of combines in the system? c. What is the average number of combines in line? d. What is the average time spent being repaired and waiting? e. What is the average time spent in line waiting for repair?

Q: A professor sits in his office and answers questions from his students the afternoon before the final exam. His class is a mass lecture of 350 students, so he concentrates on providing explanations as quickly as possible. On average, he can answer 60 questions an hour and students arrive at his office every five minutes. Student arrivals are Poisson distributed, each student has only one question and answer times are exponentially distributed. a. What fraction of his time does the professor spend answering questions? b. What is the average number of students waiting outside his office? c. What is the average time a student spends in line outside the professor's office?

Q: Customers in a small retail store arrive at the single cashier at the rate of 10 per hour. The average service time for the cashier is five minutes. Arrivals tend to follow a Poisson distribution, and service times follow an exponential distribution. a. What is the average utilization of the cashier? b. What is the average number of customers in the system? c. What is the average number of customers in line? d. What is the average time spent in the system? e. What is the average time spent in line?

Q: A HD TV manufacturer produces sets at the rate of 72 units per week. The TV sets weigh 23 pounds each and two dozen fit on a pallet. If the shipping class is to be 70, what's the break-even point for a more favorable shipping rate and what does it cost to send a week's supply of TVs?

Q: A New Holland supplier ships flywheels to the assembly plant for the model 68 Hayliner string baler. Each flywheel weighs 80 pounds and 10 of them fit on a standard pallet. A complete pallet ships as freight class specification 85. Use the matrix of weight breaks and freight class (below) to calculate the shipping cost for a demand of 15 pallets and also determine the shipping cost per flywheel.

Q: Copies of the Wall Street Journal are printed locally and delivered to ten different newsstands throughout the area. The spotter picks up the papers at 4 a.m. and visits each site once, drops off a predetermined number of copies, and proceeds to the next location before returning to the printer. The driver has always determined his route "pretty much at random" however he recently read an article (in the Wall Street Journal) that addressed sustainability issues in services. He was so taken with the sustainability concept that he has decided to determine an optimal route for his ten stops. One morning he picks up his papers at 4 a.m. and then jots down each possible route and adds up the total distance traveled for that route. If it takes him one minute to evaluate a route, at what time will he begin to make his deliveries?

Q: Jackson Sheds has four different warehouse configurations under study, ranging from four warehouses to seven warehouses (only integer values). Each warehouse has a capacity of 200 units and costs $200 to maintain over the course of a year. Demand can range from 1,000 units per year up to 2,000 units in increments of 250 units. If the system warehouse capacity is sufficient to handle the year's demand, then the per unit cost is $2 per unit, but if the warehouse capacity is insufficient, the per unit cost for each unit in excess of system capacity is $3 per unit. The likelihood for each possible demand is shown in the table. Likelihood 0.1 0.2 0.3 0.3 0.1 Demand 1,000 1,250 1,500 1,750 2,000 Which warehouse configuration is best for Jackson Sheds?

Q: Jackson Sheds has four different warehouse configurations under study, ranging from four warehouses to seven warehouses (only integer values). Each warehouse has a capacity of 200 units and costs $400 to maintain over the course of a year. Demand can range from 1,000 units per year up to 2,000 units in increments of 250 units. If the system warehouse capacity is sufficient to handle the year's demand, then the per unit cost is $2 per unit, but if the warehouse capacity is insufficient, the per unit cost for each unit in excess of system capacity is $5 per unit. The likelihood for each possible demand is shown in the table. Likelihood 0.1 0.2 0.3 0.3 0.1 Demand 1,000 1,250 1,500 1,750 2,000 Which warehouse configuration is best for Jackson Sheds?

Q: Jackson Sheds has four different warehouse configurations under study, ranging from four warehouses to seven warehouses (only integer values). Each warehouse has a capacity of 400 units and costs $200 to maintain over the course of a year. Demand can range from 1,000 units per year up to 2,000 units in increments of 250 units. If the system warehouse capacity is sufficient to handle the year's demand, then the per unit cost is $2 per unit, but if the warehouse capacity is insufficient, the per unit cost for each unit in excess of system capacity is $5 per unit. The likelihood for each possible demand is shown in the table. Likelihood 0.1 0.2 0.3 0.3 0.1 Demand 1,000 1,250 1,500 1,750 2,000 Which warehouse configuration is best for Jackson Sheds?

Q: Jackson Sheds has four different warehouse configurations under study, ranging from four warehouses to seven warehouses (only integer values). Each warehouse has a capacity of 300 units and costs $200 to maintain over the course of a year. Demand can range from 1,000 units per year up to 2,000 units in increments of 250 units. If the system warehouse capacity is sufficient to handle the year's demand, then the per unit cost is $2 per unit, but if the warehouse capacity is insufficient, the per unit cost for each unit in excess of system capacity is $5 per unit. The likelihood for each possible demand is shown in the table. Likelihood 0.1 0.2 0.3 0.3 0.1 Demand 1,000 1,250 1,500 1,750 2,000 Which warehouse configuration is best for Jackson Sheds?

Q: A national firm has beef jerky processing facilities in Locations 1, 2, 3, and 4. They ship to central distributors (represented as A, B, C, and D) handling four regions of the country. The per-unit shipping costs between each possible combination of locations are shown in the following table. A B C D 1 $5 $10 $5 $4 2 $3 $4 $4 $3 3 $8 $6 $8 $2 4 $2 $3 $5 $9 The processing facility locations are capable of monthly production (in tons) as follows: Location 1: 600 Location 2: 350 Location 3: 475 Location 4: 850 The central distributors have firm commitments for the following quantities: Distributor A: 650 Distributor B: 725 Distributor C: 400 Distributor D: 500 What is the lowest-cost shipping arrangement that can be made between the plant locations and distributors and what is the annual shipping cost?

Q: Consider the transportation tableau shown below. What is the minimum cost of transporting the production from Ada, Bugtussle, and Choctaw to Durant, Edmond, and Foss if costs per unit are shown at the intersections of each location? Durant Edmond Foss Capacity Ada 5 7 3 200 Bugtussle 3 4 4 300 Choctaw 8 6 8 200 Requirements 250 300 150

Q: The VP of Finance studied the printing costs at the university and knew it was time for bold, decisive action. The annual fixed cost of printing at the school was $850,000 and the per-page cost was one cent. Fortunately, his brother-in-law happened to own a company that would lease the printers to the university for only $600,000. The only issue to be decided was what the per-page cost would be for the leased printers. On average, the university had been printing about 10,000,000 pages per year. What would a break-even per-page printing cost be given the average printing volume?

Q: The VP of Finance studied the printing costs at the university and knew it was time for bold, decisive action. The annual fixed cost of printing at the school was $850,000 and the per-page cost was two cents. Fortunately, his brother-in-law happened to own a company that would lease the printers to the university for only $600,000 and charge ten cents per page. At what point would the university be indifferent between owning their printers and leasing their printers?

Q: The VP of Finance studied the printing costs at the university and knew it was time for bold, decisive action. The annual fixed cost of printing at the school was $1,250,000 and the per-page cost was one cent. Fortunately, his brother-in-law happened to own a company that would lease the printers to the university for only $850,000 and charge three cents per page. At what point would the university be indifferent between owning their printers and leasing their printers?

Q: Champion Cooling Company remanufactures window air conditioners during the off-season months for sales during the scorching months of June, July, and August in the Oklahoma City area. Their average inventory of air conditioners is shown in the following table. The company operates 50 weeks a year and has average weekly sales of $3,750 and expects to sell $135,000 worth of product in a year. Unit Type Avg. Inventory (at cost) Value of Each 110 Volts 65 $250 18,000 BTU or smaller 220 Volts 90 $350 Larger than 18,000 BTU 50 $500 a. What is their average aggregate inventory value? b. What is their total inventory (measured as weeks of supply)? c. What is their inventory turnover?

Q: Complete the following MPS Record.

Q: Complete the following MPS Record

Q: Consider the MPS, BOM, and inventory data shown. Master Production Schedule: The following table shows the MPS start quantities for the next 10 weeks. Finished Item A 1 2 3 4 5 6 7 8 9 10 Finished Item A MPS Start 20 40 30 20 40 Bill of Material: - Item A uses 2 each of component D, 1 each of component C and 2 each of subassembly B. - Subassembly B uses 2 each of component E. Selected Inventory Data: Item Lot Sizing Rule Lead Time Scheduled Receipts On-Hand B L4L 1 40 in period 1 C POQ = 3 2 40 D FOQ = 250 1 100 E L4L 2 160 in period 2 Construct the MRP schedule using the preceding information.

Q: Complete the following MRP record using the FOQ rule: