ISE310 Spring 2008
Due 02/19/08 (6 points)
1. This is a team assignment. All team members get the same grade. If a student
does not contribute to the homework, the team should so indicate. The team does
not have to be permanent, but this can be a good start towards your first project.
2. You are to construct a problem along the lines of Chapter 5. Describe the problem
you are solving in words, followed by equations and a solution derived with solver.
Discuss the solution – how you arrived at it, how reasonable it is, what you think
of it, how it might be improved, etc.
3. Write a one-paragraph summary suitable for senior management, acquainting
them with the results of your study.
for consideration – multiple products, more than one level of
distribution, varying taxes and tariffs by market, initial costs and operating costs,
location of sources, customers and manufacturing plants. Keep in mind that solver
is limited and you need to keep your variables within its limits. Build your model
slowly and carefully in small parts – it is much easier to debug.
5. Summarizing, your output should be the summary, the body of your report and the
Excel solution that can be read without too much difficulty by someone familiar
with Excel, Solver, and optimization problems. Use a single Excel file – you can
either type into it for the written part or copy bitmaps from Word or Powerpoint.
FirstRate Inc. is a major developer of Automatic External Defibrillator (AED) equipment based out of the United States, primarily
serving major metropolitans on the West and East coasts.
FirstRate’s management is currently considering plans to expand
manufacturing capabilities into the Midwest region due its lower production costs and tariffs.
The management has asked for more
information regarding this initiative’s influence on the national production cost structure.
It is sufficient to assume a binary
constraint for each region.
With low taxes and a high capacity rate of 50,000 units produced from the Midwest, we recommend that a new plant be opened in
With this new production facility in the Midwest, produced units will be shipped to the local area and meet demand
(Midwest) of 15 million units, as well as shipped to meet demand needs in the West of 35 million units.
With all plants operating at
high capacity less the Northeast location, total demand of 155 million units is met.
Projected national costs are about $94.88
million with the addition of this new plant per production and shipping cycle.
FirstRate’s management has also asked for an outline of potential production plants in the Midwest.
Potential areas of production
interest tend not to stray far from major metropolitans to meet demand for skilled workers or areas of major parts suppliers.
production in these plants will continue on to secondary inspection in federally predestinated locations, where a third party will test