midterm 1 solutions - IE 343 Fall 2009 Name: _ Student ID:...

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IE 343 Fall 2009 Name: _______________________ Student ID: ___________________ 1 IE 343 Midterm 1. Sep 23 rd , 2009 Closed Book, Closed Notes Show all of your work . Your work and answers must be shown on the pages provided. Write your name and student ID in the spaces provided above. For problems 4 and 7, note that no interest tables are required; you are to carry your answer to the point where the equation for each problem is specified –e.g., “1,000(A/P, 10%, 5)+1,500+200(A/F, 10%, 5)” and stop here. Your grade on this problem will be based on the correctness of the equation and the clarity of your work leading up to the equation. For problems 2, 3, 5 and 6 , interest tables are required and provided for you to perform your calculations.
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Name: _______________________ Student ID: ___________________ 2 1. A company produces a memory chip that is used in manufacturing cell phones. The fixed cost is $16,000 per month, and the variable cost is $40 per chip. The selling price per unit is P=$200 – 0.025D, where D is monthly demand. Maximum output of the plant is 3,600 units per month. a) Determine the demand quantity that maximizes profit. 8 points TR = 200D – 0.025D 2 TC = 16000 + 40D = TR – TC = 160D – 0.025D 2 – 16000 D * = 3200 b) What is the breakeven level of the firm? 5 points We have 0.025D 2 – 160D + 16000 = 0. Solving quadratically, D = 102 or 6298. Since maximum output is 3,600, breakeven can only occur at D = 102. c) What is the range of profitable demand?
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This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue University-West Lafayette.

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midterm 1 solutions - IE 343 Fall 2009 Name: _ Student ID:...

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