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**Unformatted text preview: **/ Homework #3 — Due 10/07/08 Chapter 8 Use the following information for questions 1-3 After purchasing printed T—shirts for events on campus over the last several years, you
start to think about making some money for yourself. You look into buying equipment
that prints T-shirts and ﬁnd that there are two options. Option 1 costs more up front, but
it takes less time to print each T-shirt, resulting in a lower variable cost. Option 2 costs
less up front, but takes more time to print each T-shirt, resulting in a higher variable cost.
The basic information is below: Fixed Cost Variable Cost (per Unit)
Option 1 $10,000 $3 Option 2 $2,000 $7 1. What would the cost of each option be if you sold 500 T-shirts? Which option would
you choose? <
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Opti‘wf F6 + V6 * K r ‘Low ﬁrst» : (9(00 C hook 0/04“?) n 02 What would the cost of each option be if you sold 4,000 T-shirts? Which option
would you choose? [Most 0/1929’1 1 What is the indifference point (determine the number of T-shirts where the cost of the
two Options is equal)? FCMVC.” : ch VCL*X :2) 501% 7[M X {IO/00,9 1" 53X : {1900 +571: 8,000 I ‘7’x
X: 2,000 T" Shir-F5 ( Bo’ﬂa 0’04—(043 (95+ ‘/L,000 +0 [Hak‘ 2,000 T‘Sk.‘l+g> 2. You are really not sure of how many T-shirts you can sell, so you decide to assign
some probabilities to the demand. You predict the following: T-Shirt Sales Probability
1 .000 25%
2,500 45% 3, 500 30% Based on this prediction, draw the decision tree for Options 1 and 2. Make sure to draw
and calculate each of the branches on the decision tree (i.e. cost of Option 1 for 1,000,
2,500 and 3,500). Also calculate the expected value (demand outcome) of the two
branches. Based on the expected value, would you choose Option 1 or Option 2? 6
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EV: 317/275. Ev: ‘(3’000 ”.Z{ fJ’);Yw’¢'/€ + ﬁzolgo‘) I: .30
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Eu> 7,000x,15+ *l?,f0uX.VS* M9500 ”30 Ckao» 0p+foa 1 3. For Options 1 and 2, if you could sell each T-shirt for $11, what is your breakeven point?
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PC? ‘1 000 4“(("7 4. You are running a J ifﬁeLube oil change center. On average, the center can service 12 customers per hour and 10 customers arrive every hour. ) ,7 a f r 5 ”J fat-c ; ,0 c vs; N1 ,
What is the average utilization? J“ t s“ ”’l‘e ”J" T i 7* U’d/hr
/ a ~.L...,, 9
Fiﬁ ’ ’ 33.3%; l'L What is the average number of customers waiting in the waiting line? )‘ w‘ _
Z ’ 7’7 Cus-fon-Lcr; What is the average number of customers in the waiting line system? \I - A 0
CS ,ﬂ : —-’-"“"’ g cust'omcrg hr «10
What is the average time spent waiting in the waiting line?
A ,ML—— -
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T‘" «Mir/ll "((1403 L“ M What is the average time spent in the waiting line system? - 4.- #1,..- _ .u
T5- [(4—1 ’ (7,-” ’ ,glvwrs ’ 30 ﬂux: 14:; 5. A new employee at JifﬁeLube changes the oil on the ﬁrst car in 30 minutes. She
changes the oil in the next car in 24 minutes. 5“ 722%: M New 237 What is her learning rate?
_ 0
Laék/‘lek, [eraJI'C ' 3" MUN/Hg ' .30 ’ X0 /o How long will it take her to change the oil in the 10th car? Tn : 7" {\L :> 7—“, : Bani-«2415" .7771 “4-3! Inf-“14¢: How long will it take her to change the oil in the ﬁrst 20 cars? g7: > T, x én“ :5 £710: 3amnuks X MJ/Z’J’ : 3’V-55m‘m‘rs ...

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