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Unformatted text preview: KEY BUS 370 FA10  Homework #2 — Due 10/26/10 Chapter 8
Use the following information for questions 13: You want to rival Michael Dell and make billions of dollars manufacturing personal
computers. You research the cost of buying equipment to assemble computers and find
that there are two options. Option 1 is more automated so it costs more up front, but it
takes less time (labor hours) to assemble each computer, resulting in a lower variable
cost. Option 2 costs less up front, but takes more time to assemble each computer,
resulting in a higher variable cost. The basic information is below: Fixed Cost Variable Cost {per Unit)
Option 1 $5,000,000 $300 Option 2 $2,000,000 $600 1. What would the cost of each option be if you sold 8,000 computers? Which option
would you choose? .p ‘ 4r 1 , 4 ,
WW1 i PC, + x/C.wcompms 2 “ 20mm + 300” 5W two/000 {
Opi’t’" 25 FC?’ 4‘ VClx‘NLco "WM/4‘" ‘: I 2,000, 000 + ‘éoo Icy/000 Z é’XOOIOOO Cost Option 1 is: Cost Option 2 is: Choose Option (1 or 2): *émvvo 2. What is the cost of each option if you sold 12,000 computers? Which option would
you choose? 01,55“ 1 .' {€000,000 +£300¥ly000 : Itgléooiaoo
Ophonl" “2,000, 000 t {(900 “How '« 4"}, 200/ 002) Cost Option 1 is: Cost Option 2 is: Choose Option (1 or 2): 3. What is the indifference point (determine the number of computers where the cost of
the two Options is equal)? FCIHIC' “#Lqu/Jvfrd : Fézi. chpﬁ (”MIN/{fig {CaiVC‘é’lﬁﬁM‘S‘
u I; . , 5  $ 9" 5,000,300 + 300 n ﬂan/,4”; ' 2.000) Dan *‘QUOK’ﬁCornpr/{rri‘ Indifference Point is: _ 4! 3,000,000 ,_
[0 (900 #ComKu‘k/K ' “V ’ [0/000 (awn/vhf! 4. You are really not sure of how many computers you can sell, so you decide to assign
some probabilities to the demand. You predict the following: Computer Sales Probability
7,000 25%
9,000 60%
12,000 15% Based on this prediction, draw the decision tree for Options 1 and 2. Make sure to draw
and calculate each of the branches on the decision tree (i.e. cost of Option 1 for 7,000,
9,000 and 12,000; cost of Option 2 for 7,000, 9,000 and 12,000). Also calculate the
expected value (demand outcome) of the two branches. Based on the expected value,
would you choose Option 1 or Option 2? {0,1,92000 @2991 tiS'I~r\+"300»7ooo: “MM
Demnj Sales: ‘I 000 a» (902,3 ‘ 9m “3.90 x a 000 : ‘ ‘7.“‘m I; Wham {abjzllow ., tsp/0 215,4H2w .42 000: (316M My" Sc (644' + if g“ "9 '100065729‘791 tam ”boo #7 00.9: 11.3!“
(9p um 65;
Q beNénJ gait! 400..)(94094, ' {204*1900‘G’ 000: $77M who“ $2 QL7lL0dacai§/, ’2M+’éoo*1200o—$‘13M z
9V1: §,ch; = . 2§¥ 97.1,“ #190" “7.7/4 +.i§r‘X.éM: “wezgm Eta" 35’ " ‘élww .50 c’7.w«+ ,:§  “Iarx = ‘73370M Expected Value Option 1: Expected Value Option 2: Choose Option (1 or 2):
3 7.925!“ 57.370 m 09H” .1 5. For Options 1 and 2, if you could sell each computer for $700, what is your breakeven
point? B€P _ FC.  ‘ 5,000,0w0  R'VC, ’ ‘700’f300 u: '2. 500 comkaff
PEP} ' «'VC‘L : i,700 ‘kéao  £01000 cJMPg/‘frf
Breakeven Point 1: Breakeven Point 2: 6. You are running a JifﬁeLube oil change center. On average, the center can service 15
customers per hour and 12 customers arrive every hour. ) ; 42.4.3 (J “‘4‘ : l 1 cu 5+ / k ( What is the average utilization? M 3 Se r Wu, ref: : I g (.an /A r . [2 Luff/Inf A 9
v: 55“; A, . ,30 W 30/0
"' d What is the average number of customers waiting in the waiting line?
A 7' l 2. ‘ ﬂ
' 3 D CW:/4(,q«,\) i§('§'l1v) : 3.1 Lu§+0w1§ What is the average number of customers in the waiting line system? >\ n 7. C; : A'A ‘ 19” ' L/ Cas+omcrr
What is the average time spent waiting in the waiting line? T )x :— 'z___._..—— I 2; hf I Iémfav‘t;
alékf ur 3&5“... W 2/1044) ”((5—11)  What is the average time spent in the waiting line system? ~ I : —L————— : E kr I QOMTW‘kK 7. A new employee at JifﬁeLube changes the oil on the ﬁrst car in 40 minutes. She
changes the oil in the next car in 36 minutes. {(6 T4101: 3 (a I P“? ¢ ,1 3 ‘7 What is her learning rate? How long will it take her to change the oil in the 10th car? T Béhoq _ 0
LHQ: ‘f1 1 Llama. ‘ .90 yr 90/: Tn : T n b : ancbeUkS x .70; : 3312045,. 2 3'2 0'12;ka How long will it take her to change the oil in the ﬁrst 15 cars in total? 2 TA : T, énb : Vanni x H.339 : ygyjémﬂ— ~—7 5 HM; Chapter 9 Note: Round all forecasts to the nearest whole number (round up at .5 or above) 1. For Periods 46, calculate a 3 period moving average forecast Period Demand Forecast n
; 2: F r .2 D—
3 59 *“ °:‘ n
4 61
5 57
6 59
. D3+b1+b. _ §ﬁ+é$+ €17 »_ 4
FL/’ is ~ 3  g
§7+ 6l+€9 _ g
‘é1+§?+é?_ ,:_._._————— 7
F5. 3 » 4' f; 3 3 Period Moving Average Forecast:
Period 4: Period 5 Period 6: 2. For Periods 36, calculate a 2 period weighted moving average forecast with Wt = .70, WH= .30
Period Demand Forecast
1 56 n
i 2: Em? WM»
4 61 "f
5 57
6 59
F3: 1 .sz = .7xé3+~3*% = 4:!
Pg: '7): 2:“ ,W’ éO
*7: é+ ,nga = 90 Pg:
Fe? 17" §74.3"él 2 Period Weighted Moving Average Forecast:
Period 3: Period 4: Period 5: Period 6: H 3. For Periods 26, calculate an exponential smoothing forecast with 0: = .7 Period Demand Forecast
55 57 64
:2 12'. = control/i
71 76 05015de .7»?! +.’$xé5"=é‘i Exponential Smoothing Forecast:
Period 2: Period 3: Period 4: Period 5: Period 6: €3WWEE€£ 4. For Periods 16, calculate AFN, an exponential smoothing forecast with Trend with ct = .7 and B = .4 (HINT: You can use the Forecast from problem 3 — you only need to
calculate Trend and add it to Forecast to get AF — Formula 9.5). Round Trend to the nearestwholenumber. AF+H ; EH +11“ ;T;+I f I3(Feu’E>+0B) T; Period Demand Forecast Trend Adiusted Forecast 1 55: b. 57 = F. 3:7. AE:F.+T,= $7r32é0
2 64 54, 1 § 5'7 3 60 e: 3 (a; 4 67 él ’ (c7— 5 71 gs 3. 9'7 6 éﬁ 3 ‘71. 76
T1: [WERy (1,7?)1“, ; .L/x(sc,—§7)+.ex2 =(
T}: .q(é2Sé)+.é“l = 3
Tyr,b{(éi’é1)+'éxg: ‘ TS ~, .Wés'éll’né“ ‘ r 9
T— q(99’é,;)+.(axz : 3
b/ I Adjusted Exponential Smoothing Forecast:
Period 1: Period 2: Period 3: Period 4: Period 5: Period 6: (¢ 0&5
m‘v‘i ’ F0
\ D’
[XI/1W“
5. For the following data, calculate MAD and MFE (7
Period Demand Forecast FEL lFEo l
1 53 55  I). 3
2 59 53 [a ‘0
3 60 58 :L 2
4 59 60 ‘ I i
5 63 59 q q
6 66 62 q t, L
a 3&3" "3 VI = ﬁlFE‘cl
6 FE' .. ‘ '
n” _ in . t I 3 _
I‘H’E— '“ :T'DJL
L
 .3 (FE l I <1 —
Mﬂbvr—‘T—ij‘: 2M;
MAD: MFE:
3 l t l 2 .l L
6. You are trying to determine an appropriate number of pizzas to order depending on
the size of the student group. You tracked the number students as well as the number of
pizzas eaten at the last 4 events. Use the following data to create a linear regression
forecasting model to predict the number of pizzas needed. Express your answer as: y = a
+ bx. 7.
X y X " Y X»)( at X
# of Sggdents # of rszzas ‘3 1 9 I D 2 ‘l
44 13 S") 7. l Q 3 e
17 6 p o 1 2 8‘!
65 21 l 3 é S 1! 2 7 S
SY= ’53 2‘1: S19 5Xy: 335‘] fg‘127q7"!
é):  Si}: ' I S 3 2 So
~th g,” : 339$? _ 23'3‘7i‘3175't 384 ; 3]
4" n ‘Iqw if“ 'WW (9241 '133
F3 ’\ 5 x , _
» §Y_ '_~_ £3_ I93 .. 9212“?
asswax a=7 l>‘ n  v 3‘" «I "2 Using your linear regression forezlsting model, predict the number of pizzas needed for a gathering of 54 students.
ge) Y 1 § 9 # Pizzas: , 6‘ A
art‘s): 519$ 'Qggr» ,ZIYg‘f: I7/>{22a§ Chapter 10
Use the following information for questions 13: Your company has decided to analyze whether to continue managing and operating the
cafeteria, or whether to outsource it to CafeteriaCo. CafeteriaCo will charge you an
annual management fee of $750,000 plus charge you $5 per meal served. Your internal
costs to operate the cafeteria on a yearly basis are listed below (assuming 80,000 meals): Operating Expenses Direct Labor $ 420,000
Beneﬁts $ 75,000
Food $ 175,000
Indirect Labor $ 50,000
Equipment Depreciation $ 150,000
Overhead § 200,000
Total Cost $ 1,070,000 2 1“,. 5,, r4; 1. If you expect to serve 80,000 meals next year, would you insource or outsource (show
your work)? _ ‘3'
OuiSaurze : {73'0I000 +‘§/mw(*20,000 WC, 6/50/0052 Insource or Outsource: 2. If you expect to serve 125,000 meals next year (for insource: direct labor increases by
$200,000, beneﬁts increase by $40,000 and food by $100,000), would you insource or
outsource (show your work)? 8“ J:
‘In 59”“ 951,070,000 + $200,000 + 90,000 «14/00/090 r 1,7,0, 000 vaSource , <1[750,000 '1 55/404 X )zgoao «wk: $1,375,000 Insource or Outsource: 3. If a company manufactures televisions, would operating a cafeteria typically be
considered a “core competency”? Yes or No: Use the following information for question 4:
Summary Data for 3 possible suppliers Performance Dimension Supplier A Supplier B Supplier C Price 3 $550/unit 3 $350/unit 2 $450/unit
Quality 3 1% defects l 8% defects I 6% defects
Delivery 3 6 weeks i 15 weeks 7 10 weeks
Rating Values 1 2 3
Price >$500/unit $400500/unit <$400/unit
Quality >5% defects 25% defects <2% defects
Delivery >12 weeks 812 weeks <8 weeks
Wei hts Price Quality Delivery
.4 .3 .3 4. Use the weightedpoint evaluation system to calculate the weighted average
performance for each supplier. Choose which supplier wins. 4mm" A: ,«m 4 .2» a + .24 : 2,1 é/MIIer 5: 448+ 3*!» ,3»! — 7.3}
é/Mira C; 54*24 :3’I*.2*21.‘[ Winning Supplier: Chapter 11
Your company is purchasing 50,000 pounds of steel from both Supplier 1 and Supplier 2 this year. Each late delivery costs your company $200 and each pound of defective
material costs your company $400. Basic information on the two suppliers is provided below:
Cost Category Supplier 1 Supplier 2
Price per pound $3.50 $4.00
Defect Rate 1/150 1/500
Late Deliveries/yr. 12 4 1. What is the Total Cost of Ownership for the year for Supplier l and Supplier 2? $
4; 
Tc.» (Wm 1): (‘ 3.9/4 k €0,000 “55 {753 " WW“ V0040? " W) '
$175,900 $13333; + ‘Z‘foo = ‘3“),722 TCO(§,/plfgr .71)" U L/_U/IL x sly/0‘29 “Q4215: “ 577/004 '55 “ “MN (‘0‘ ”0"): ‘3‘“). 700
Supplier l: Supplier 2: \vva 37ha/‘d76n
‘—> \s .
L ‘4 $2; ® :> ll $K'Ip rued1 j p 0/} K D. 5 LC}! a wk 2‘
Chapter 12 Use the following information for questions 13: Every week, BosssMustang of Oakland, California, receives one shipment each from 12
different suppliers in the Los Angeles area. Each shipment weighs about 700 pounds. A Los Angeles 3 PL provider has offered to run a consolidation warehousing operation
for BosssMustang. The 3PL provider would pick up the shipments from each supplier,
process them and put them on a single truck bound for Oakland. The pickup fee would
be $120 per supplier, and the warehousing cost would be $40 per hundredweight (per
hundred pounds). A truck shipment from Los Angeles to Oakland costs $ 600.
1. How much does BosssMustang’s current transportation solution cost per week? l1 skip/nod; k {Elm/glowed 1 1r7, 7—00
CurrentCost: 2. How much does the 3 PL provider’s transportation solution cost per week?
. c’ a . _ 2 r
Puck VP . [IQ/(«meta ’° llSup/Lprs W '40 , '&/~Lw" “(a 700A. 4:
+(onsﬁlcdaiéOM art “55 ‘ [m V W; X 'lS‘u‘p merit 7’ 33L0 + sﬁ:PM‘~+ : I SLh'pmeaf' x (éwD/gkz‘pmf 1 $400 $’
3PL’s Cost: g! go 0 3. Which solution would you choose? How much money would you save? Current or 3PL: Savings: (”5+ A a: V'w“ “I K Cvsf I Cuyf ? Use the following information for questions 46: Astro Industries of Minneapolis, Minnesota, makes weekly shipments to 9 customers in
the Dallas area. Each customer’s order weighs, on average, 1400 pounds. A Dallas based warehousing ﬁrm has offered to run a breakbulk warehousing operation
for Astro at the cost of $50 per hundredweight. Local deliveries to each customer would
cost $250 per customer. Astro would make 1 breakbulk shipment to the Dallas based
warehousing ﬁrm each week. A direct shipment from Minneapolis to Dallas costs $1,500. 4. How much does Astro Industries’ current transportation solution cost per week?
 f . _
‘1 SL4, nwvu‘r " /§00/5lm‘,omwf <4: [3:00 Current Cost:
§ 1 3 , $00 5. How much does the Dallas based warehousing ﬁrm’s transportation solution cost per
week? Skﬁemm‘ 5 l Shirwd KKIIS’OO/jkivomzqf‘: {1,920 , xso Moo IL
Brmltbvlk ' [00" X skwmf Y’ Qékéomaif? : $ 4/200 Cuh‘prm, Dom/07: 42f0/‘0510M, delivery» 0] 2 9' 2,?ga Dallas Firm’s Cost: 6. Which solution would you choose? How much money would you save? Current or Dallas Firm: Savings: ...
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