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CAPACITY PLANNING- Old Exam Questions

CAPACITY PLANNING- Old Exam Questions - CAPACITY PLANNING...

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CAPACITY PLANNING OLD EXAM QUESTIONS (The answer key is at the end of this document.) Tube Country owns a “fleet” of 200 river rafts, rented by tourists who wish to float down the Ichituckni River. Each raft is returned on the same day it is rented, and each raft can only be rented once during a business day. Rough water and predators (animals with sharp teeth) along the Ichituckni River often cause rafts to become scratched and leak air, so the staff at Tube Country is constantly repairing rafts to ready them for their next rental. As a result, Tube Country estimates that 5% of its rental fleet is unavailable for rent at any given time, as these rafts are awaiting repairs. Tube Country rents rafts for $6 each, and incurs $1.00 in variable costs with each raft rental. Tube Country must also pay $20,000 in fixed business costs annually. Please answer the following five questions, based on this information.
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