Exam 2 Fall 2010_11wAnswers

Exam 2 Fall 2010_11wAnswers - University of Pittsburgh...

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University of Pittsburgh BUSQOM 0050 Quantitative Methods EXAM 2 Fall 2010 PLEASE READ CAREFULLY THE INSTRUCTIONS BELOW: Be sure to put your name on both the Answer Book as well as on the top of this page of the Exam Questions. This is a closed-book exam for which you have 1 hour and 15 minutes. All of your answers should be written in the Answer Book. The use of calculators, computers and cell phones in not permitted during the exam. Because of the limited space between students in the classroom, please cover your answers as much as possible (a proctor may occasionally remind you to do this). Both the Answer Book and the Exam Questions must be handed in at the end of the exam. We will carefully monitor the exam to ensure the highest possible level of fairness. Any cheating will result in a score of zero on the exam and will be brought to the attention of the Dean’s Office. I hope you find that the exam is a fair reflection of the lectures, the assigned readings, the end-of-chapter exercises, and the homework projects. Best wishes! R. E. Wendell
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1. Make or Buy (25 points) The California Kettle Company (CKC) is experiencing tremendous growth in the demand for its two types of outdoor barbeque grills: a charcoal grail and a gas grill. CKC has contracted to supply its customers each week with a total of 20,000 charcoal grills and 10,000 gas grills. CKC's production is limited by the availability of processing time in three departments: Production, Assembly, and Packaging. Table 2 provides the hours of processing time available per week in each department and the processing time required in each department by each type of grill: Processing Times (hours per grill) Charcoal Grill Gas Grill Processing Availability (hours per week) Production Department 0.10 0.20 2500 Assembly Department 0.15 0.25 4000 Packaging Department 0.05 0.05 2000 Owing to this limited availability of processing time, CKC cannot meet its demand with in-house production. Consequently, CKC has been negotiating with another manufacturer who currently has excess production capacity. This manufacturer has agreed to supply CKC with any combination of charcoal and gas grills at a unit cost of $50 per charcoal grill and $100 per gas grill. These unit costs exceed CKC's in-house
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Exam 2 Fall 2010_11wAnswers - University of Pittsburgh...

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