p4_sp2011 - PRELIM 4 ORIE 3310/5310 May 3, 2011 Closed book...

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Unformatted text preview: PRELIM 4 ORIE 3310/5310 May 3, 2011 Closed book exam. Justify all work. 1. For internet sales a company receives credit card payments from four regions of the country: West, Midwest, East, South. The average daily value of the payments due to sales in the respective regions is $70,000, $50,000, $60,000, $40,000. The company is considering establishing lockboxes (bank accounts which can accept credit card payments) in four cities: Los Angeles, Chicago, New York, Atlanta. The clearing time , i.e., number of days from the day that a credit card payment is made to a lockbox until the day when its dollar value is available as cash for investment, depends both on the region from which the payment is made and the location of the lockbox, as indicated in the following table: L.A. Chicago N.Y. Atlanta West 2 6 8 8 Midwest 6 2 5 5 East 8 5 2 5 South 8 5 5 2 The annual cost of maintaining a lockbox in any city is $50,000 and we assume that the company earns 12% by investing its available cash....
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This note was uploaded on 02/09/2012 for the course OR&IE 3310 taught by Professor Trotter during the Spring '10 term at Cornell University (Engineering School).

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p4_sp2011 - PRELIM 4 ORIE 3310/5310 May 3, 2011 Closed book...

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