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Unformatted text preview: / Homework #3 — Due 10/07/08 Chapter 8 Use the following information for questions 13 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 Tshirts and ﬁnd that there are two options. Option 1 costs more up front, but
it takes less time to print each Tshirt, resulting in a lower variable cost. Option 2 costs
less up front, but takes more time to print each Tshirt, 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 Tshirts? 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 Tshirts? Which option
would you choose? [Most 0/1929’1 1 What is the indifference point (determine the number of Tshirts 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" ShirF5 ( 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 Tshirts you can sell, so you decide to assign
some probabilities to the demand. You predict the following: TShirt 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 Tshirt 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 fatc ; ,0 c vs; N1 ,
What is the average utilization? J“ t s“ ”’l‘e ”J" T i 7* U’d/hr
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Fiﬁ ’ ’ 33.3%; l'L What is the average number of customers waiting in the waiting line? )‘ w‘ _
Z ’ 7’7 CusfonLcr; 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?
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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?
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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 “43! 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’V55m‘m‘rs ...
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