Homework 3

Homework 3 - BUAD 311T Homework 3 1. Valiant vs. Volare...

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1 BUAD 311T Homework 3 1. Valiant vs. Volare Your company designs sophisticated electronic toys for toy manufacturers. Your primary responsibility is the procurement of ASICs (application specific integrated circuits). You work primarily with two suppliers of ASICs, Valiant Designs and Volare Technologies. Each supplier processes jobs from customers on a first come first serve basis. The inter-arrival times of demand at Valiant Designs are exponentially distributed with mean 4 days, while at Volare Technologies they are exponentially distributed with mean 3 days. On average it takes 2.5 days to complete a job at either firm, with a standard deviation on this completion time equal to 0.5 days. You have just accepted a job from Barracuda Toys. You will earn $50,000 from the contract, but Barracuda Toys specifies that delivery must occur within 30 days. If the 30- day deadline is not met, Barracuda Toys only pays $40,000. That is, there is a $10,000 penalty for a late delivery. If the supplier ships the job to you within 20 days
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This note was uploaded on 07/21/2009 for the course BUAD 311T taught by Professor Vaitsos during the Fall '07 term at USC.

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Homework 3 - BUAD 311T Homework 3 1. Valiant vs. Volare...

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