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Quantitative Methods For Business 11th Edition David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam - Solutions
Tucker Inc. produces high-quality suits and sport coats for men. Each suit requires 1.2 hours of cutting time and 0.7 hours of sewing time, uses 6 yards of material, and provides a profit contribution of $190. Each sport coat requires 0.8 hours of cutting time and 0.6 hours of sewing time, uses 4
The Porsche Club of America sponsors driver education events that provide high-performance driving instruction on actual racetracks. Because safety is a primary consideration at such events, many owners elect to install roll bars in their cars. Deegan Industries manufactures two types of roll bars
Davison Electronics manufactures two LCD television monitors, identified as model A and model B. Each model has its lowest possible production cost when produced on Davison’s new production line. However, the new production line does not have the capacity to handle the total production of
Better Products, Inc., manufactures three products on two machines. In a typical week, 40 hours are available on each machine. The profit contribution and production time in hours per unit are as follows:Two operators are required for machine 1; thus, 2 hours of labor must be scheduled for each
Adirondack Savings Bank (ASB) has $1 million in new funds that must be allocated to home loans, personal loans, and automobile loans. The annual rates of return for the three types of loans are 7% for home loans, 12% for personal loans, and 9% for automobile loans. The bank’s planning committee
Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:Type I rooms do not have Internet access and are not available for the Business rental class. Round
Industrial Designs has been awarded a contract to design a label for a new wine produced by Lake View Winery. The company estimates that 150 hours will be required to complete the project. The firm’s three graphics designers available for assignment to this project are Lisa, a senior designer and
Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows:The shaper is available for 120 hours, and the grinder is available for 110 hours.
National Insurance Associates carries an investment portfolio of stocks, bonds, and other investment alternatives. Currently $200,000 of funds are available and must be considered for new investment opportunities. The four stock options National is considering and the relevant financial data are as
Georgia Cabinets manufactures kitchen cabinets that are sold to local dealers throughout the Southeast. Because of a large backlog of orders for oak and cherry cabinets, the company decided to contract with three smaller cabinetmakers to do the final finishing operation. For the three
Benson Electronics manufactures three components used to produce cell telephones and other communication devices. In a given production period, demand for the three components may exceed Benson’s manufacturing capacity. In this case, the company meets demand by purchasing the components from
Golf Shafts, Inc. (GSI) produces graphite shafts for several manufacturers of golf clubs. Two GSI manufacturing facilities, one located in San Diego and the other in Tampa, have the capability to produce shafts in varying degrees of stiffness, ranging from regular models used primarily by average
The Pfeiffer Company manages approximately $15 million for clients. For each client, Pfeiffer chooses a mix of three investment vehicles: a growth stock fund, an income fund, and a money market fund. Each client has different investment objectives and different tolerances for risk. To accommodate
La Jolla Beverage Products is considering producing a wine cooler that would be a blend of a white wine, a rosé wine, and fruit juice. To meet taste specifications, the wine cooler must consist of at least 50% white wine, at least 20% and no more than 30% rosé, and exactly 20% fruit juice. La
The program manager for Channel 10 would like to determine the best way to allocate the time for the 11:00–11:30 evening news broadcast. Specifically, she would like to determine the number of minutes of broadcast time to devote to local news, national news, weather, and sports. Over the
Gulf Coast Electronics is ready to award contracts for printing their annual report. For the past several years, the four-color annual report has been printed by Johnson Printing and Lakeside Litho. A new firm, Benson Printing, inquired into the possibility of doing a portion of the printing. The
PhotoTech, Inc., a manufacturer of rechargeable batteries for digital cameras, signed a contract with a digital photography company to produce three different lithium-ion battery packs for a new line of digital cameras. The contract calls for the following:Battery Pack Production QuantityPT-100
TJ’s, Inc., makes three nut mixes for sale to grocery chains located in the Southeast. The three mixes, referred to as the Regular Mix, the Deluxe Mix, and the Holiday Mix, are made by mixing different percentages of five types of nuts.In preparation for the fall season, TJ’s
J. D. Williams, Inc., is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that recommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund, and a money market
Reep Construction recently won a contract for the excavation and site preparation of a new rest area on the Pennsylvania Turnpike. In preparing his bid for the job, Bob Reep, founder and president of Reep Construction, estimated that it would take four months to perform the work and that 10, 12,
The Westchester Chamber of Commerce periodically sponsors public service seminars and programs. Currently, promotional plans are under way for this year’s program. Advertising alternatives include television, radio, and newspaper. Audience estimates, costs, and maximum media usage
The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability:a. Develop a linear programming model of the Hartman Company
The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenue-producing investments together
Hilltop Coffee manufactures a coffee product by blending three types of coffee beans. The cost per pound and the available pounds of each bean are as follows:Consumer tests with coffee products were used to provide ratings on a scale of 0100, with higher ratings indicating higher
Ajax Fuels, Inc., is developing a new additive for airplane fuels. The additive is a mixture of three ingredients: A, B, and C. For proper performance, the total amount of additive (amount of A+ amount of B + amount of C) must be at least 10 ounces per gallon of fuel. However, because of safety
G. Kunz and Sons, Inc., manufactures two products used in the heavy equipment industry. Both products require manufacturing operations in two departments. The following are the production time (in hours) and profit contribution figures for the two products:For the coming production period, Kunz has
As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars):The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its
The Clark County Sheriff’s Department schedules police officers for 8-hour shifts. The beginning times for the shifts are 8:00 A.M., noon, 4:00 P.M., 8:00 P.M., midnight, and 4:00 A.M. An officer beginning a shift at one of these times works for the next 8 hours. During normal weekday operations,
Reconsider the Welte Mutual Funds problem from Section 9.2. Define your decision variables as the fraction of funds invested in each security. Also, modify the constraints limiting investments in the oil and steel industries as follows: No more than 50% of the total funds invested in stock (oil
An investment advisor at Shore Financial Services wants to develop a model that can be used to allocate investment funds among four alternatives: stocks, bonds, mutual funds, and cash. For the coming investment period, the company developed estimates of the annual rate of return and the associated
Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity, and no one supplier can meet all the company’s needs. In addition, the suppliers charge different prices for the components. Component price data (in price per
The Atlantic Seafood Company (ASC) is a buyer and distributor of seafood products that are sold to restaurants and specialty seafood outlets throughout the Northeast. ASC has a frozen storage facility in New York City that serves as the primary distribution point for all products. One of the ASC
Romans Food Market, located in Saratoga, New York, carries a variety of specialty foods from around the world. Two of the store’s leading products use the Romans Food Market name: Romans Regular Coffee and Romans DeCaf Coffee. These coffees are blends of Brazilian Natural and Colombian Mild
The production manager for the Classic Boat Corporation must determine how many units of the Classic 21 model to produce over the next four quarters. The company has a beginning inventory of 100 Classic 21 boats, and demand for the four quarters is 2000 units in quarter 1, 4000 units in quarter 2,
Seastrand Oil Company produces two grades of gasoline: regular and high octane. Both gasolines are produced by blending two types of crude oil. Although both types of crude oil contain the two important ingredients required to produce both gasolines, the percentage of important ingredients in each
The Ferguson Paper Company produces rolls of paper for use in adding machines, desk calculators, and cash registers. The rolls, which are 200 feet long, are produced in widths of 11/2, 21/2, and 31/2 inches. The production process provides 200-foot rolls in 10-inch widths only. The firm must
Frandec Company manufactures, assembles, and rebuilds material handling equipment used in warehouses and distribution centers. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec’s production schedule calls for 5000
The Two-Rivers Oil Company near Pittsburgh transports gasoline to its distributors by truck. The company recently contracted to supply gasoline distributors in southern Ohio, and it has $600,000 available to spend on the necessary expansion of its fleet of gasoline tank trucks. Three models of
The Silver Star Bicycle Company will be manufacturing both men’s and women’s models for its Easy-Pedal 10-speed bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current
Filtron Corporation produces filtration containers used in water treatment systems. Although business has been growing, the demand each month varies considerably. As a result, the company utilizes a mix of part-time and full-time employees to meet production demands. Although this approach provides
Greenville Cabinets received a contract to produce speaker cabinets for a major speaker manufacturer. The contract calls for the production of 3300 bookshelf speakers and 4100 floor speakers over the next two months, with the following delivery schedule:Greenville estimates that the production time
TriCity Manufacturing (TCM) makes Styrofoam cups, plates, and sandwich and meal containers. Next week’s schedule calls for the production of 80,000 small sandwich containers, 80,000 large sandwich containers, and 65,000 meal containers. To make these containers, Styrofoam sheets are melted
EZ-Windows, Inc., manufactures replacement windows for the home remodeling business. In January, the company produced 15,000 windows and ended the month with 9000 windows in inventory. EZ-Windows’ management team would like to develop a production schedule for the next three months. A smooth
Morton Financial must decide on the percentage of available funds to commit to each of two investments, referred to as A and B, over the next four periods. The following table shows the amount of new funds available for each of the four periods, as well as the cash expenditure required for each
Western Family Steakhouse offers a variety of low-cost meals and quick service. Other than management, the steakhouse operates with two full-time employees who work 8 hours per day. The rest of the employees are part-time employees who are scheduled for 4-hour shifts during peak meal times. On
The Flamingo Grill is an upscale restaurant located in St. Petersburg, Florida. To help plan an advertising campaign for the coming season, Flamingo’s management team hired the advertising firm of Haskell & Johnson (HJ). The management team requested HJ’s recommendation concerning how
Phoenix Computer manufactures and sells personal computers directly to customers. Orders are accepted by phone and through the company’s Web site. Phoenix will be introducing several new laptop models over the next few months, and management recognizes a need to develop technical support
The Scottsville Textile Mill1 produces five different fabrics. Each fabric can be woven on one or more of the mill’s 38 looms. The sales department’s forecast of demand for the next month is shown in Table (a), along with data on the selling price per yard, variable cost per yard, and
Davis Instruments has two manufacturing plants located in Atlanta, Georgia. Product demand varies considerably from month to month, causing Davis extreme difficulty in workforce scheduling. Recently Davis started hiring temporary workers supplied by WorkForce Unlimited, a company that specializes
Duke Energy manufactures and distributes electricity to customers in the United States and Latin America. Duke recently purchased Cinergy Corporation, which has generating facilities and energy customers in Indiana, Kentucky, and Ohio. For these customers Cinergy has been spending $725 to $750
Reconsider the Leisure Airlines problem from Section 12.1. The demand forecasts shown in Table represent Leisure Airs best estimates of demand. But because demand cannot be forecasted perfectly, the number of seats actually sold for each origin-destination-itinerary fare (ODIF) may turn
Reconsider the Leisure Airlines problem from Section 12.1. Suppose that as of May 1 the following number of seats have been sold:a. Determine how many seats are still available for sale on each flight leg.b. Using the original demand forecasted for each ODIF, determine the remaining demand for each
Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. The Classic Corvette Owners Association
In the latter part of Section 12.2 we developed a moderate risk portfolio model for Hauck Investment Services. Modify the model given so that it can be used to construct a portfolio for more aggressive investors. In particular, do the following:a. Develop a portfolio model for investors who are
Table shows data on the returns over five 1-year periods for six mutual funds. A firms portfolio managers will assume that one of these scenarios will accurately reflect the investing climate over the next 12 months. The probabilities of each of the scenarios occurring are 0.1, 0.3,
Consider the problemMin2X2 - 20X + 2XY + Y2 - 14Y + 58s.t. X + 4Y ≤ 8a. Find the minimum solution to this problem.b. If the right-hand side of the constraint is increased from 8 to 9, how much do you expect the objective function to change?c. Resolve the problem with a new right-hand side of 9.
GreenLawns provides a lawn fertilizer and weed control service. The company is adding a special aeration treatment as a low-cost extra service option, which it hopes will help attract new customers. Management is planning to promote this new service in two media: radio and direct-mail advertising.
The functionf(X, Y) = 3(1 - X)2e(- X2-(Y+1)2) 10(x/5 X3 Y5)e(-X2 Y2) e(-(X+1) Y2)/3was used to generate Figures (a) and (b) in order to illustrate the concept of local optima versus global optima.FIGURE (a)A FUNCTION WITH
The Cobb-Douglas production function is a classic model from economics used to model output as a function of capital and labor. It has the formf (L, C) = c0Lc1Cc2Where c0, c1, and c2 are constants. The variable L represents the units of input of labor and the variable C represents the units of
Let S represent the amount of steel produced (in tons). Steel production is related to the amount of labor used (L) and the amount of capital used (C) by the following function:S = 20L0.30C0.70In this formula L represents the units of labor input and C the units of capital input. Each unit of labor
The profit function for two products isProfit = -3x12 + 42x1 – 3x22 + 48x2 + 700Where x1 represents units of production of product 1 and x2 represents units of production of product 2. Producing one unit of product 1 requires 4 labor-hours and producing one unit of product 2 requires 6
Heller Manufacturing has two production facilities that manufacture baseball gloves. Production costs at the two facilities differ because of varying labor rates, local property taxes, type of equipment, capacity, and so on. The Dayton plant has weekly costs that can be expressed as a function of
Harry Markowitz received the 1990 Nobel Prize for his path-breaking work in portfolio optimization. One version of the Markowitz model is based on minimizing the variance of the portfolio subject to a constraint on return. We use the data and notation developed for the Hauck Index Fund in Section
Many forecasting models use parameters that are estimated using nonlinear optimization. This is true of many of the models developed in Chapter 6. Consider the exponential smoothing forecasting model from Section 6.2. For instance, the basic exponential smoothing model for forecasting sales isFt+1
The purpose of this exercise is to learn how to calculate stock returns for portfolio models using actual stock price data. First, it is necessary to obtain stock price data. One source (of many) is Yahoo! Go to the link finance.yahoo.com and type in a ticker symbol such as AAPL (for Apple
Formulate and solve the Markowitz portfolio optimization model that was introduced in Problem 14 using the data from Problem 16. In this case, nine scenarios correspond to the yearly returns from 1997 through 2005, inclusive. Treat each scenario as being equally likely and use the scenario returns
Using the data obtained in Problem 16, construct a portfolio from Apple, AMD, and Oracle that matches the Information Technology S&P index as closely as possible. Use the return data for the Information Technology S&P index given in the following table. The model for constructing the
Most investors are happy when their returns are “above average,†but not so happy when they are “below average.†In the Markowitz portfolio optimization model in Problem 14, the objective function is to minimize variance which is given byWhere Rs is the portfolio return
This problem requires a basic understanding of the normal probability distribution. Investors are often interested in knowing the probabilities of poor returns. For example, for what cutoff return will the probability of the actual return falling below this cutoff value be at most 1%? Consider the
Options are popular instruments in the world of finance. A call option on a stock gives the owner the right to buy the stock at a predetermined price before the expiration date of the option. For example, on Friday, August 25, 2006, call options were selling for Procter & Gamble stock that gave the
The port of Lajitas has three loading docks. The distance (in meters) between the loading docks is given in the table below:Three tankers currently at sea are coming into Lajitas. It is necessary to assign a dock for each tanker. Also, only one tanker can anchor in a given dock. Currently, ships 2
Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg. The cost in dollars of producing a kitchen chair at each of the two plants is given here.Aynor: Cost = 75Q1 + 5Q21+ 100Spartanburg: Cost = 25Q2 + 2.5Q22+ 150WhereQ1 = number of chairs produced at
This case is based on the Q.M. in Action, Pricing for Environmental Compliance in the Auto Industry. In this case we build a model similar to the one built for General Motors. The CAFE requirement on fleet miles per gallon is based on an average. The harmonic average is used to calculate the CAFE
Indicate which of the following is an all-integer linear program and which is a mixed-integer linear program. Write the LP Relaxation for the problem but do not attempt to solve.a. Max 30x1 + 25x2s.t. 3x1 + 1.5x2 ≤ 4001.5x1 + 2x2 ≤ 250 1x1 + 1x2 ≤ 150 x1, x2 ≥ 0 and
Consider the following all-integer linear program:Max 5x1 + 8x2s.t.6x1 + 5x2 ≤ 309x1 + 4x2 ≤ 36 1 x1 + 2 x2 ≤ 10 x1, x2 ≥ 0 and integera. Graph the constraints for this problem. Use dots to indicate all feasible integer solutions.b. Find the optimal solution to the LP
Consider the following all-integer linear program:Max 1x1 + 1x2s.t.4x1 + 6x2 ≤ 221x1 + 5x2 ≤ 152x1 + 1x2 ≤ 9 x1, x2 ≥ 0 and integera. Graph the constraints for this problem. Use dots to indicate all feasible integer solutions.b. Solve the LP Relaxation of this problem.c.
Consider the following all-integer linear program:Max 10x1 + 3x2s.t.6x1 + 7x2 ≤ 403x1 + 1x2 ≤ 11 x1, x2 ≥ 0 and integera. Formulate and solve the LP Relaxation of the problem. Solve it graphically, and round down to find a feasible solution. Specify an upper bound on the value of
Consider the following mixed-integer linear program:Max 2x1 + 3x2s.t.4x1 + 9x2 ≤ 367x1 + 5x2 ≤ 35 x1, x2 ≥ 0 and x1 integera. Graph the constraints for this problem. Indicate on your graph all feasible mixed-integer solutions.b. Find the optimal solution to the LP Relaxation.
Consider the following mixed-integer linear program:Max 1x1 + 1x2s.t.7x1 + 9x2 ≤ 639x1 + 5x2 ≤ 453x1 + 1x2 ≤ 12 x1, x2 ≥ 0 and x2 integera. Graph the constraints for this problem. Indicate on your graph all feasible mixed-integer solutions.b. Find the optimal solution to the LP
The following questions refer to a capital budgeting problem with six projects represented by 0-1 variables x1, x2, x3, x4, x5, and x6:a. Write a constraint modeling a situation in which two of the projects 1, 3, 5, and 6 must be undertaken.b. Write a constraint modeling a situation in which, if
Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives, the net present value of the future stream of returns, the capital requirements, and the available capital funds over the next three years are summarized as follows:a.
Hawkins Manufacturing Company produces connecting rods for 4- and 6-cylinder automobile engines using the same production line. The cost required to set up the production line to produce the 4-cylinder connecting rods is $2000, and the cost required to set up the production line for the 6-cylinder
Grave City is considering the relocation of several police substations to obtain better enforcement in high-crime areas. The locations under consideration together with the areas that can be covered from these locations are given in the following table:Potential Locationsfor Substations Areas
Hart Manufacturing makes three products. Each product requires manufacturing operations in three departments: A, B, and C. The labor-hour requirements, by department, are as follows:During the next production period, the labor-hours available are 450 in department A, 350 in department B, and 50 in
Yates Company supplies road salt to county highway departments. The company has three trucks, and the dispatcher is trying to schedule tomorrows deliveries to Polk, Dallas, and Jasper counties. Two trucks have 15-ton capacities, and the third truck has a 30-ton capacity. Based on these
Recall the Martin-Beck Company distribution system problem in Section 11.3.a. Modify the formulation shown in Section 11.3 to account for the policy restriction that one plant, but not two, must be located either in Detroit or in Toledo.b. Modify the formulation shown in Section 11.3 to account for
An automobile manufacturer has five outdated plants: one each in Michigan, Ohio, and California and two in New York. Management is considering modernizing these plants to manufacture engine blocks and transmissions for a new model car. The cost to modernize each plant and the manufacturing capacity
CHB, Inc., is a bank holding company that is evaluating the potential for expanding into a 13-county region in the southwestern part of the state. State law permits establishing branches in any county that is adjacent to a county in which a PPB (principal place of business) is located. The
The Northshore Bank is working to develop an efficient work schedule for full-time and part-time tellers. The schedule must provide for efficient operation of the bank including adequate customer service, employee breaks, and so on. On Fridays the bank is open from 9:00 A.M. to 7:00 P.M. The number
Refer to the Ohio Trust bank location problem introduced in Table shows the counties under consideration and the adjacent counties.TABLECOUNTIES IN THE OHIO TRUST EXPANSION REGIONCounties Under Adjacent CountiesConsideration (by Number)1. Ashtabula .............2, 12, 162. Lake ...............1, 3,
Refer to the Salem Foods share of choices and address the following issues. It is rumored that King’s is getting out of the frozen pizza business. If so, the major competitor for Salem Foods will be the Antonio’s brand pizza.a. Compute the overall utility for the Antonio’s
Burnside Marketing Research conducted a study for Barker Foods on some designs for a new dry cereal. Three attributes were found to be most influential in determining which cereal had the best taste: ratio of wheat to corn in the cereal flake, type of sweetener (sugar, honey, or artificial), and
Refer to Problem 14. Suppose that management determined that its cost estimates to modernize the New York plants were too low. Specifically, suppose that the actual cost is $40 million to modernize each plant.a. What changes in your previous 0-1 integer linear programming model are needed to
The Bayside Art Gallery is considering installing a video camera security system to reduce its insurance premiums. A diagram of the eight display rooms that Bayside uses for exhibitions is shown in Figure; the openings between the rooms are numbered 113. A security firm proposed that
The Delta Group is a management consulting firm specializing in the health care industry. A team is being formed to study possible new markets, and a linear programming model has been developed for selecting team members. However, one constraint the president imposed is a team size of three, five,
Roedel Electronics produces a variety of electrical components, including a remote controller for televisions and a remote controller for DVD players. Each controller consists of three subassemblies that are manufactured by Roedel: a base, a cartridge, and a keypad. Both controllers use the same
A mathematical programming system named SilverScreener uses a 0-1 integer programming model to help theater managers decide which movies to show on a weekly basis in a multiple-screen theater (Interfaces, May/June 2001). Suppose that management of Valley Cinemas would like to investigate the
East Coast Trucking provides service from Boston to Miami using regional offices located in Boston, New York, Philadelphia, Baltimore, Washington, Richmond, Raleigh, Florence, Savannah, Jacksonville, and Tampa. The number of miles between each of the regional offices is provided in the following
ASW Publishing, Inc., a small publisher of college textbooks, must make a decision regarding which books to publish next year. The books under consideration are listed in the following table, along with the projected three-year sales expected from each book:The books listed as revisions are texts
Using aggressive mail promotion with low introductory interest rates, Yeager National Bank (YNB) built a large base of credit card customers throughout the continental United States. Currently, all customers send their regular payments to the bank’s corporate office located in Charlotte,
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