MAN - A.24 Answers to select problems in Module A A.5(a...

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Unformatted text preview: A.24 Answers to select problems in Module A A.5 (a) EMV (assembly line) = (0.4)($10,000) + (0.6)($40,000) = $28,000 EMV (plant) = (0.4)(– $100,000) + (0.6)($600,000) = $320,000 EMV (nothing) = Select the new plant option. (b) EVPI = $364,000 - 320,000 = $44,000 A.6 Row Average Increasing capacity $700,000 Using overtime $700,000 Buying equipment $733,333 ← Using equally likely, “Buying equipment” is the best option. A.8 (a) Expected cost of hiring full-timer = 0.2(300) + 0.5(500) + 0.3(700) = $60 + 250 + 210 = $520 Expected cost of part-timers = 0.2(0) + 0.5(350) + 0.3(1,000) = $0 + 175 + 300 = $475 Thus, use part-time lawyers A.8 (b) As consistent with part (a), she should hire part-time lawyers. A.11 (a) The primary challenge in this problem is constructing the payoff table. Each book stocked and sold results in a $30 profit. That’s $2100 for the combination 70–70. Each book stocked but not sold results in a $46 loss. Demand that cannot be satisfied results in no loss of revenue or profit. Profit from each book sold = loss....
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MAN - A.24 Answers to select problems in Module A A.5(a...

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