Opma Test 1 Solutions

# Opma Test 1 Solutions - Name OPMA 3306 Section 571 Test...

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Name: __________________________ OPMA 3306, Section 571 Feb 23, 2006 Possible Points = 100 1. A manufacturing firm is considering whether to produce or subcontract the production of a new product. The estimated fixed costs associated with this new product are \$100,000 per year. The projected price is \$25 per unit, and the variable cost of production is \$7.50. An alternative is to subcontract the production of this product. The fixed cost associated with subcontracting is negligible and is assumed to be zero. The variable costs for subcontracting are \$15.00 per unit. a. What is the break-even quantity between these two options? (5 pts) F M = \$100,000 F B = \$0 C M = \$7.50/Unit C B = \$15.00/Unit b. If expected demand is 25,000 units, should you make the product yourself, or subcontract it? (5 pts) Make. TC M = F M + QC M = \$100,000 + 25,000(\$7.50) = 100,000 + 187,500 = \$287,500 TC B = F B + QC B = \$0 + 25,000(\$15) = 0 + 375,000 = \$375,000 334 , 13 333 , 13 5 . 7 000 , 100 5 . 7 15 0 000 , 100 = = - - = - - = B M M B C C F F Q

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2. Consider the tasks, durations, and predecessor relationships in the following network. a. Calculate the expected duration and variance for each activity (T E ). (10 pts) 6 4 p m a T E + + = 2 2 6 - = a p σ b. Draw the network. (5 pts) Activity Immediate Predecessor(s) Optimistic (Weeks) Most Likely (Weeks) Pessimistic (Weeks) T E 2 A --- 8 12 16 12 1.777778 B A 6 8 22 10 7.111111 C A 2 3 4 3 0.111111 D C 2 2 2 2 0 E C 6 8 10 8 0.444444 F B, D, E 4 8 12 8 1.777778 G F 1 2 3 2 0.111111
Start A 12 B 10 C 3 D 2 E 8 F 8 G 2 End

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c. Determine ALL paths, their durations, and their variances. What is the critical path? (10 pts) PATH Duration Path Variance A,B,F,G 32 10.7777778 A,C,D,F,G
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## This note was uploaded on 04/23/2011 for the course OPMA 3306 taught by Professor Weltman during the Spring '08 term at UT Arlington.

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Opma Test 1 Solutions - Name OPMA 3306 Section 571 Test...

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