final01 - Name _ DADSS Final 2001 This test will be graded...

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Name ___________________________ DADSS Final 2001 This test will be graded as a typical test. Partial credit will be awarded, so show your work. Neatness does in fact count. If we can't read your writing, it's hard to give partial credit. If for some strange reason you decide to use a pen, you had better not make a mistake on the test that requires you to blot something out. Put your name on each page. Try to answer the questions on the page that the question is on. You may use the back of the page and additional pages if necessary. The point values are indicated by each question. Though you will have the full three hours, the test is designed to take about 2 hours and will be equal in weight to a midterm. Good Luck. Note: For graphical solutions, show all constraints ( clearly labeled ), the feasible region, the objective function, the coordinates of optimal point, and the optimal value. It is best to look at the problem and decide on the scales before drawing your first line. BE NEAT! 1 _______ 2 _______ 3 _______ 4 _______ 5 _______ 6 _______ 7 _______ 8 _______ 1
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Name ___________________________ DADSS Final 2001 9 _______ Total __________ 2
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Name ___________________________ DADSS Final 2001 1) The Primo Insurance Company has two products: 1) high-risk insurance and 2) mortgage insurance. The expected cost for high-risk is $6,000 per unit, while for mortgage insurance, it is $4,000 per unit. Management wishes to minimize cost but because of a union contract, the company has restrictions on the minimum number of workers. Department Persons per unit Minimum People High-risk Mortgage Underwriting 8 2 24 Administration 2 4 8 Claims 6 4 12 Primo wants to establish sales quotas for the their insurance products. a) Solve the problem graphically. Clearly show all relevant information. b) What is the shadow price of Underwriting workers? c) How expensive must high-risk insurance become before Primo sells only mortgage insurance? 3
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DADSS Final 2001 d) If the minimum number of claims workers was 20, what combination of insurance products will give the least cost? 4
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This note was uploaded on 09/20/2010 for the course SDS 88223 taught by Professor Fischbeck during the Spring '10 term at Carnegie Mellon.

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final01 - Name _ DADSS Final 2001 This test will be graded...

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