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1998exam1-soln

# 1998exam1-soln - = = =-q z c c c q u u 3…(a 395 2 9917...

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IE 221 OPERATIONS RESEARCH – PROBABILISTIC MODELS EXAM 1 FALL 1998 1 … gal 4 . 516 3 ) 5000 )( 80 ( 2 2 * = = = n KD q 1 month shelf life life. shelf over demanded gal 66 . 416 12 5000 = 66 . 416 * q life. shelf month 2 over demand gal 3 . 833 15 . 365 6 ) 5000 )( 80 ( 2 (doubled) 6 h and facility better with EOQ let * < = = = = d q Old storage facility: TC(416.66) = (12)(80) + (3)(1/2)(416.66) = 1585 Better storage facility: TC(365.15) = 2191 ) 6 )( 5000 )( 80 )( 2 ( 2 = = KDh Therefore, order 1 month supply = 416.66, and store in old facility. 2 … let q = amount planned for monthly expenses (i.e., not invested) 100,000 – q = amount invested monthly interest = (24/12)% = 2% d ~ Normal: μ = 6000/mo. σ = 2000/mo.

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