Managerial Decision Modeling With Spreadsheets 3rd Edition Barry Render - Solutions

13 In the environment of increased competition, a fitness club executive is considering the purchase of additional equipment. His alternatives, outcomes, and payoffs (profits) are shown in the following table:EQUIPMENT FAVORABLE MARKET UNFAVORABLE MARKET Acme $400,000 - +175,000 Standard $280,000 -
16 Debbie Gibson is considering three investment options for a small inheritance that she has just received—stocks, bonds, and money market. The return on her investment will depend on the performance of the economy, which can be strong, average, or weak. The returns for each possible combination
22 Waldo Books needs to decide how many copies of a new hardcover release to purchase for its shelves.The store has assumed that demand will be 50, 100, 150, or 200 copies next month, and it needs to decide whether to order 50, 100, 150, or 200 books for this period. Each book costs Waldo $20 and
23 After researching the market, Waldo Books (see Problem 21) has concluded that the probabilities of selling 50, 100, 150, and 200 books next month are 0.2, 0.35, 0.25, and 0.2, respectively.(a) Using EMVs, how many books should Waldo order?(b) Using EOL, how many books should Waldo order?(c)
24 A souvenir retailer has an opportunity to establish a new location inside a large airport. The annual returns will depend primarily on the size of the space she rents and if the economy will be favorable.The retailer has worked with the airport concession commission, and has projected the
25 An ambulance driver has three major routes from the hospital base station to the university, to which he makes several trips weekly. The traffic patterns are, however, very complex. Under good conditions, Broad Street is the fastest route. When Broad is congested, one of the other routes, either
27 In Problem 26, you helped a group of medical professionals analyze a decision, using EMV as the decision criterion. This group has also assessed its utility for money: U1- +45,0002 = 0,U1- +40,0002 = 0.1, U1- +5,0002 = 0.7, U1+02 = 0.9, U1+95,0002 =0.99, and U1+100,0002 = 1.(a) Are the medical
29 A manufacturer buys valves from two suppliers. The quality of the valves from the suppliers is as follows:PERCENTAGE DEFECTIVE PROBABILITY FOR SUPPLIER A PROBABILITY FOR SUPPLIER B 1 0.60 0.30 3 0.25 0.40 5 0.15 0.30 For example, the probability of getting a batch of valves that are 1% defective
32 You have been hired by the No Flight Golf Company, and your first task is to decide whether to market a new golf ball utilizing breakthrough technology and, if so, determine the price. The payoff of your decision will be affected by whether your competitor will market similar balls and the price
33 Your regular tennis partner has made a friendly wager with you. The two of you will play out one point in which you can serve. The loser pays the winner$100. If your first serve is not in play, you get a second serve. If your second serve is not in play, you lose the point. You have two kinds of
36 You are reconsidering your analysis of the tennis wager between you and your partner (see Problem 33) and have decided to incorporate utility theory into the decision making process.The following table describes your utility values for various payoffs:MONETARY VALUE UTILITY −$100 0.00 −$ 50
39 Shamrock Oil (see Problem 37) has decided to rely on utility theory to assist in the decision concerning the oil field. The following table describes its utility function;all monetary values are in thousands of dollars:MONETARY VALUE UTILITY−$ 600 0.00−$ 500 0.03−$ 50 0.10$ 400 0.15$ 550
41 Jim Sellers (see Problem 40) has been able to estimate his utility for a number of different values, and he would like to use these utility values in making his decision. The utility values are U(–$104,000)0, U(–$89,000) 0.5, U(–$84,000) 0.55, U(–$20,000) 0.7, U(–$5,000) 0.8,
43 Jason Scott (see Problem 42) has decided to incorporate utility theory into his decision with his mortgage application. The following table describes Jason’s utility function:MONETARY VALUE UTILITY−$4,800 0.00−$2,900 0.10−$2,400 0.12−$1,000 0.15−$ 500 0.19$ 0 0.21$1,900 0.26$2,400
45 Replace all monetary values in Problem 44 with the following utilities:MONETARY VALUE UTILITY$100,000 1.00$ 80,000 0.40$ 0 0.20−$ 20,000 0.10−$ 80,000 0.05−$100,000 0.00(a) What do you recommend, based on expected utility?(b) Is the investor a risk seeker or a risk avoider?Justify your
46 The Jamis Corporation is involved with waste management.During the past 10 years it has become one of the largest waste disposal companies in the Midwest, serving primarily Wisconsin, Illinois, and Michigan. Bob Jamis, president of the company, is considering the possibility of establishing a
49 Lathum Consulting is an econometrics research firm that predicts the direction of the gross national product(GNP) during the next quarter. More specifically, it forecasts whether the GNP will grow, hold steady, or decline. The following table describes Lathum’s track record from past
50 In the past few years, the traffic problems in Lynn McKell’s hometown have gotten worse. Now, Broad Street is congested about half the time. The normal travel time to work for Lynn is only 15 minutes when she takes Broad Street and there is no congestion.With congestion, however, it takes Lynn
1. What do you recommend?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob was always looking for something new. With the recent deaths of several celebrity skiers, Bob knew he could use his creative
2. What is the opportunity loss for this problem?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob was always looking for something new. With the recent deaths of several celebrity skiers, Bob knew he
3. Compute the expected value of perfect information.After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob was always looking for something new. With the recent deaths of several celebrity skiers, Bob
4. Was Bob completely logical in how he approached this decision problem?After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of the Utah Rocky Mountains.As an amateur inventor, Bob was always looking for something new. With the recent deaths of several
1. Discuss the trade-off curves for cost of waiting time and cost of service.
2. Understand the three parts of a queuing system:the arrival population, the queue, and the service facility.
3. Describe basic queuing system configurations.
4. Understand the assumptions of common queuing models discussed in this chapter.
5. Use Excel to analyze a variety of operating characteristics of queuing systems.
6. Understand more complex queuing systems.
4 Why must the service rate be greater than the arrival rate in a single-server queuing system?
11 From historical data, Harry’s Car Wash estimates that dirty cars arrive at a rate of 10 per hour all day Saturday. With a crew working the wash line, Harry figures that cars can be cleaned at a rate of one every five minutes. One car at a time is cleaned in this example of a single-server
12 Rockwell Electronics Corporation retains a service crew to repair machine breakdowns that occur on an average of l = 3 per day (approximately Poisson in nature). The crew can service an average of m = 8 machines per day, with a repair time distribution that resembles the exponential
18 Sal’s International Barbershop is a popular haircutting and styling salon near the campus of the University of New Orleans. Four barbers work full time and spend an average of 15 minutes on each customer. Customers arrive all day long, at an average rate of 12 per hour. When they enter, they
21 A local office of the Department of Motor Vehicles(DMV) wishes to overcome the reputation of making citizens wait in line for extremely long times before being able to conduct their business. Accordingly, the DMV is analyzing how best to serve the driving public. Its goal is to make sure that
22 Julian Argo is a computer technician in a large insurance company. He responds to a variety of complaints from agents regarding their computers’performance. He receives an average of one computer per hour to repair, according to a Poisson distribution.It takes Julian an average of 50 minutes
34 A technician monitors a group of five computers in an automated manufacturing facility. It takes an average of 15 minutes, exponentially distributed, to adjust any computer that develops a problem. The computers run for an average of 85 minutes, Poisson distributed, without requiring
1. Understand the basic steps of conducting a simulation.
2. Explain the advantages and disadvantages of simulation.
3. Tackle a wide variety of problems by using simulation.
4. Set up and solve simulation models by using Excel’s standard functions.
5. Use the Crystal Ball add-in for Excel to set up and solve simulation models.
6. Explain other types of simulation models.
3 What types of management problems can be solved more easily by using decision modeling techniques other than simulation?
4 What are the major steps in the simulation process?
10 How might drawing a flow diagram help in developing a simulation model?
12 What does Scenario Manager allow you to accomplish in an Excel-based simulation model?
13 Do you think we can use Excel’s Solver to solve simulation models? Why or why not?
15 Edward Owen is responsible for the maintenance, rental, and day-to-day operation of several large apartment complexes on the upper-east side of New York City. Owen is especially concerned about the cost projections for replacing air conditioner(A/C) compressors. He would like to simulate the
16 Jay’s Appliances sells micro-fridges according to the monthly demand distribution shown in the table at the top of the next page. Simulate 6 years of demand and compare theoretical and simulated results for the following measures:(a) Average demand.(b) Probability that demand will be less than
17 Shawn Bishop, a neuroscience PhD student at Clarksville University, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship;however, he also makes extra money in most months by tutoring undergraduates in their introductory
18 Chelsea Truman sells celebrity magazines on Sunday morning in an area surrounded by three busy shopping centers. Demand for the magazines is distributed as shown in the following table:DEMAND PROBABILITY 50 0.05 75 0.10 100 0.25 125 0.30 150 0.20 175 0.10 Chelsea has decided to order 100
19 The Paris Bakery has decided to bake 30 batches of its famous beignets at the beginning of the day. The store has determined that daily demand will follow the distribution shown in the following table:DAILY DEMAND PROBABILITY 15 0.08 20 0.12 25 0.25 30 0.20 35 0.20 40 0.15 Each batch costs the
21 Kirkpatrick Aircrafts operates a large number of computerized plotting machines. For the most part, the plotting devices are used to create line drawings of complex wing airfoils and fuselage part dimensions.The engineers operating the automated plotters are called loft lines engineers.The
22 A high school guidance counselor has scheduled one-on-one meetings today with 10 seniors to discuss their college plans. Each meeting is scheduled for 20 minutes, with the first meeting set to start at 9:00 a.m . Due to their hectic class and extra-curricular schedules, not every student arrives
23 Dr. Carter Logue practices dentistry in Santa Fe, New Mexico. Logue tries hard to schedule appointments so that patients do not have to wait beyond their appointment time. His October 20 schedule is shown in the following table:PATIENT SCHEDULED APPOINTMENT TIME NEEDED(min.)Adams 9:30 a.m. 20
24 Lee Appliances knows that weekly demand for high-end microwaves is normally distributed, with a mean of 25 units and a standard deviation of 7 units. (In your model use integers for all demands.)Lee replenishes its inventory by ordering 300 units from the distributor whenever its current
25 Mattress Heaven orders a certain brand of mattress from its supplier and sells the mattresses at its retail location. The store currently orders 400 mattresses whenever the inventory level drops to 200. The cost to hold 1 mattress in inventory for one day is$0.75. The cost to place an order with
29 Troy’s Tires sells a certain brand tire which has a daily demand that is normally distributed, with a mean of 15 tires and a standard deviation of 4 tires. (In your model use integers for all demands.)Troy’s Tires replenishes its inventory by ordering 250 tires from the factory whenever its
30 Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A nonrefundable one-way fare with a reservation costs$129. The daily demand for this flight is given in the following table, along with the probability distribution of no-shows (where a no-show has a
32 Management of Charlottesville Bank is concerned about a loss of customers at its main office downtown.One solution that has been proposed is to add one or more drive-through teller windows to make it easier for customers in cars to obtain quick service without parking. Neha Patel, the bank
33 Erik Marshall owns and operates one of the largest BMW auto dealerships in St. Louis. In the past 36 months, his weekly sales of Z3s have ranged from a low of 6 to a high of 12, as reflected in the following table:Z3 SALES PER WEEK FREQUENCY 6 3 7 4 8 6 9 12 10 9 11 1 12 1 Erik believes that
38 A local bank has a single drive-through window with arrival times and service times that follow the distributions from the following table:TIME BETWEEN ARRIVALS(min.)PROBABILITY SERVICE TIME(min.)PROBABILITY 1 0.15 1 0.15 2 0.24 2 0.35 3 0.27 3 0.22 4 0.22 4 0.28 5 0.12 Simulate the arrival of
40 The Diego Street Convenience Store has a single checkout register, with customer arrival distribution shown in the following table:TIME BETWEEN ARRIVALS (min.)PROBABILITY 1 0.18 2 0.20 3 0.22 4 0.25 5 0.15 Service time follows a discrete uniform distribution between 1 and 4 minutes. Simulate the
44 A customer service counter at a local bookstore is normally staffed by a single employee. The probabilities of arrival times and service times are shown in the following table:TIME BETWEEN ARRIVALS(min.)PROBABILITY SERVICE TIME(min.)PROBABILITY 1 0.07 1 0.07 2 0.25 2 0.24 3 0.23 3 0.28 4 0.26 4
45 Timberwolves Electric and Wiring Company installs wiring and electrical fixtures in residential construction. Andrew Dickel, the owner of Timberwolves, has been concerned with the amount of time it takes to complete wiring jobs because some of his workers are very unreliable. For each wiring
46 A plant engineering group needs to set up an assembly line to produce a new product. The following table describes the relationships between the activities that need to be completed for this product to be manufactured:ACTIVITY DAYS IMMEDIATE a m b PREDECESSORS A 3 6 8 —B 5 8 10 A C 5 6 8 A D 1
47 Luna Martinez, director of personnel at Management Resources, Inc., is in the process of designing a program that its customers can use in the job-finding process. Some of the activities include preparing résumés, writing letters, making appointments to see prospective employers, researching
48 Lamont Henri needs to plan and manage a local construction project. The following table describes the relationships between the activities that need to be completed:ACTIVITY DAYS IMMEDIATE a m b PREDECESSORS A 4 8 13 —B 4 10 15 A C 7 14 20 B D 9 16 19 B E 6 9 11 B F 2 4 5 D, E G 4 7 11 C, F H
49 Elena Wilhelm is responsible for developing a comprehensive sales training program for her organization.The following table describes the relationships between the activities that need to be completed:ACTIVITY DAYS IMMEDIATE MINIMUM MAXIMUM PREDECESSORS A 7 13 —B 5 11 —C 3 8 A, B D 5 9 C E 2
1. Understand and know when to use various types of forecasting models.
2. Compute a variety of forecasting error measures.
3. Compute moving averages, weighted moving averages, and exponential smoothing timeseries models.
4. Decompose time-series data to identify and analyze trends and seasonality.
5. Identify variables and use them in causal simple and multiple linear regression models.
6. Use Excel to analyze a variety of forecasting models.
1 Briefly describe the steps used to develop a forecasting system.
2 What is a time-series forecasting model?
4 What is a qualitative forecasting model, and when is using it appropriate?
5 What is the meaning of least squares in a regression model?
8 Briefly describe the Delphi technique.
10 Describe how you can use charts to determine whether a forecasting model is valid.
11 What is a correlation coefficient? Why is it useful?
12 Explain how Solver can be used to identify the optimal weights in the weighted moving average model.
14 Jeannette Phan is a college student who has just completed her junior year. The following table summarizes her grade point average (GPA) for each of the past nine semesters:BAGS BAGS YEAR (thousands) YEAR (thousands)1 4 7 7 2 8 8 9 3 6 9 13 4 6 10 14 5 9 11 16 6 8 YEAR SEMESTER GPA Freshman Fall
15 Daily sales volume for Nilgiris Convenience Store is shown in the following table:WEEK SALES WEEK SALES 1 22 7 24 2 27 8 25 3 30 9 22 4 21 10 30 5 33 11 38 6 28 12 37 YEAR SALES 1 480 2 525 3 548 4 593 5 614 DAY SALES DAY SALES 1 $622 6 $656 2 $418 7 $689 3 $608 8 $675 4 $752 9 $706 5 $588 10
19 Sales of Hot-Blast heaters have grown steadily during the past five years, as shown in the following table:(a) Using exponential smoothing constants of 0.35, 0.65, and 0.95, develop forecasts for years 2 through 6. The sales manager had predicted, before the business started, that year 1’s
21 The operations manager of a musical instrument distributor feels that demand for bass drums may be related to the number of television appearances by the popular rock group Green Shades during the preceding month. The manager has collected the data shown in the following table:(a) Graph these
22 Sales of industrial vacuum cleaners at Overholt Supply Co. over the past 13 months were as follows:(a) Using a moving average with three periods, determine the demand for vacuum cleaners for next February.(b) Using a three-period weighted moving average with weights 3, 2, and 1 13 = most
26 Commuter ridership in Athens, Greece, during the summer months is believed to be heavily tied to the number of tourists visiting the city. During the past 12 years, the data in the table at the top of the next page have been obtained.(a) Use trend analysis to forecast ridership in years 13, 14,
31 Charles Brandon is thinking about investing in the Purple Arrow Company, which makes central air conditioning units. The company has been in business for over 50 years, and Charles believes it is very stable.Based on his investing knowledge and experience, Charles believes that the dividend paid
32 Thirteen students entered the undergraduate business program at Longstreet College two years ago.The table near the top of the next column indicates what their GPAs were after they were in the program for two years and what each student scored on the SAT math exam when he or she was in high
33 Sruti Singh is shopping for a used Volkswagen Golf and feels that there is a relationship between the mileage and market value of the car. The following table provides data on previous car sales from the local area:CAR MILEAGE MARKET VALUE AGE (years)1 11,600 $14,200 1 2 22,800 $14,000 1 3
35 Callaway College is a small business school that offers an MBA program. The main entrance criterion for admission to the MBA program is the Common Business Admission Test (CBAT) score. The following table provides the GPAs of 12 students who have graduated recently, along with their CBAT scores
37 Kurt’s Hardware Store advertises and sells snow blowers each season. The following table provides the annual demand, level of advertising, in dollars, and snowfall, in inches, for the past eight years:YEAR DEMAND(units) ADVERTISING SNOWFALL(inches)1 41 $4,000 82 2 38 $3,500 64 3 26 $1,800 52 4
38 Kurt’s Hardware Store (see Problem 37) would like to investigate the effect of adding annual snowfall to the regression model. The table in Problem
37 includes the annual snowfall (in inches) for the past eight years.(a) Develop a multiple regression model to predict the demand for snow blowers based on the advertising budget and the amount of snowfall.(b) What percentage of the demand variation is explained by this expanded model?(c) What is
39 The Fowler Martial Arts Academy trains young boys and girls in self-defense. Joan Fowler, the owner of the academy, notes that monthly revenue is higher when school is in session but quite low when school is out (because many children are away on vacation or at summer camp). She has researched
40 In addition to his day job as an engineer, Luis Garcia runs a small ethnic grocery store. The shop stocks food items from southeast Asian countries and caters to the large population of people from this region who live in Luis’s community. Luis wants to develop a quantitative model to forecast
41 The GNP for each quarter of the past four years is shown in the following table:YEAR QUARTER GNP (billions)1 1 $ 9,027 2 $ 9,092 3 $ 9,194 4 $ 9,367 2 1 $ 9,505 2 $ 9,588 3 $ 9,726 4 $ 9,938 3 1 $10,063 2 $10,238 3 $10,285 4 $10,375 4 1 $10,430 2 $10,473 3 $10,501 4 $10,580(a) Find the optimal
42 Using the data from Problem 41, forecast the GNP for each quarter of year 5 by using the multiplicative decomposition model. What is the MAPE value for this model?
43 The average price per gallon of gasoline in major U.S. cities for each month during a three-year period are shown in the following table:MONTH YEAR 1 YEAR 2 YEAR 3 January $2.972 $3.301 $3.472 February $2.955 $3.369 $3.484 March $2.991 $3.541 $3.447 April $3.117 $3.506 $3.564 May $3.178 $3.498

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Managerial Decision Modeling With Spreadsheets 3rd Edition Barry Render - Solutions

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