QDM Midterm - QUANTITATIVE DECISION MAKING MID-TERM TEST...

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QUANTITATIVE DECISION MAKING NAME__________________ MID-TERM TEST Spring 2005 Points Possible = 100 points POINTS = ______________ Show all of your work. Start each problem on a separate page. Submit all computer output generated in solving the problems. 1. Given a fixed cost of $50,000 to start a production process. Once the process has begun, the variable cost per unit is $25. The revenue per unit is projected to be $45. (10 points) a. Write an expression for total cost. b. Write an expression for total revenue. c. Write an expression for total profit. d. Find the break-even point. . 2. A manufacturer makes two products, doors and windows. Each must be processed through two work areas. Work area #1 has 60 hours of available production time. Work area #2 has 48 hours of available production time. Manufacturing of a door requires 4 hours in work area #1 and 2 hours in work area #2. Manufacturing of a window requires 2 hours in work area #1 and 4 hours in work area #2. Profit is $8 per door and $6 per window. (10 points) a. Define decision variables that will tell how many units to build (doors and windows). b. Develop an objective function that will maximize profits. c.

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