Asst1-MS261-W12 - Management Sciences 261, Winter 2012...

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Management Sciences 261, Winter 2012 Assignment #1 HAND IN: by 5:30 p.m., Wednesday January 18, in the Management Sciences drop box across from CPH 2367 (where CPH meets E2), in the slot for your section, labeled “MSCI 261 Fuller XXXX,” where XXXX is your lecture time, 8:30 or 10:30. Do not put yours into a slot for another Man. Sci. course, or it will get lost! LATE POLICY: 20% off if one day late; 50% off if 2 days late; 100% off if 3 or more days late. REMINDER from course outline: You may consult with other students about your written assignments, but the work that you turn in must be your own . For example, you may discuss with other students how to create a spreadsheet, in general terms, but you must code the spreadsheet yourself. Do not copy another student’s spreadsheet file or part of another student’s spreadsheet file. Do not “lend” your spreadsheet file to another student. Anyone violating these guidelines will be reported to the Associate Dean for Undergraduate Studies; the typical punishment is 0% on this assignment, and 5% deducted from your course mark. ------------------------------------------------------------------------------------------------------------------------------ Question 1. (A spreadsheet problem) [80 marks] The ABC Oil Company has found an oil deposit, and now they are trying to decide whether to spend more money to drill “production” wells, to purchase production equipment, and to operate it for 10 years. For the first 3 years of production, the natural pressure of the oil in the rocks will drive the oil to the surface, and the rate of production of oil will be constant from one year to the next. However, after the third year, the natural pressure will decline as more and more oil is taken out, and the rate of production of oil will decline each year compared to the previous. By the end of year 7, the rate of production will have declined so much that it will be necessary to buy and install equipment to inject carbon
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Asst1-MS261-W12 - Management Sciences 261, Winter 2012...

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