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

44 Using the data from Problem 43, forecast the average gasoline price for each month in year 4 by using the multiplicative decomposition model. What is the MAPE value for this model?
45 Quarterly sales figures for the Cavill Pump Company, in thousands, for the past four years are shown in the following table:QUARTER YEAR 1 YEAR 2 YEAR 3 YEAR 4 1 $263 $312 $283 $319 2 $300 $323 $320 $303 3 $245 $298 $365 $339 4 $381 $390 $398 $368(a) Forecast the demand for the first quarter of
47 The following table shows the quarterly demand, in thousands of cases, for a national beer distributor over the past 4 years:QUARTER YEAR 1 YEAR 2 YEAR 3 YEAR 4 1 294 335 433 280 2 499 507 516 524 3 437 529 501 515 4 344 285 482 530(a) Forecast the demand for the first quarter of year 5 by using
1. Understand the importance of inventory control.
2. Use inventory control models to determine how much to order or produce and when to order or produce.
3. Understand inventory models that allow quantity discounts.
4. Understand the use of safety stock with known and unknown stockout costs.
5. Understand the importance of ABC inventory analysis.
6. Use Excel to analyze a variety of inventory control models.
1 Why is inventory an important consideration for managers?
2 What is the purpose of inventory control?
4 Describe the major decisions that must be made in inventory control.
5 What are some of the assumptions made in using the EOQ?
7 What is the ROP? How is it determined?
8 What is the purpose of sensitivity analysis?
9 What assumptions are made in the EPQ model?
10 What happens to the EPQ model when the daily production rate becomes very large?
11 In the quantity discount model, why is the carrying cost expressed as a percentage of the unit cost, I , instead of the cost per unit per year, Ch ?
12 Briefly describe what is involved in solving a quantity discount model.
13 Discuss the methods that are used in determining safety stock when the stockout cost is known and when the stockout cost is unknown.
14 Briefly describe what is meant by ABC analysis.What is the purpose of this inventory technique?
15 Shakina Harris, who works in her brother’s hardware store, is in charge of purchasing. Shakina has determined that the annual demand for #6 screws is 150,000 and is fairly constant over the 200 days that the store is open each year. She estimates that it costs $30 every time an order is
16 Neha Shah is the purchasing agent for a firm that sells industrial valves and fluid control devices.One of the most popular valves is the KA1, which has an annual demand of 6,000 units. The cost of each valve is $120, and the inventory carrying cost is estimated to be 8% of the cost of each
17 Keith Smart has been in the building business for most of his life. Keith’s biggest competitor is Delta Birch. Through many years of experience, Keith knows that the ordering cost for an order of plywood is $150 and that the carrying cost is 25% of the unit cost. Both Keith and Delta receive
18 Shoes R Us is a local shoe store located in Camden.Annual demand for a popular sandal is 1,000 pairs of sandals, and Gary Cole, the owner of Shoes R Us, has been in the habit of ordering 200 pairs of sandals at a time. Gary estimates that the ordering cost is $20 per order. The cost of a pair of
19 Annual demand for the Dobbs model airplane kit is 80,000 units. Albert Dobbs, president of Dobbs’Terrific Toys, controls one of the largest toy companies in Nevada. He estimates that the ordering cost is $40 per order. The carrying cost is $7 per unit per year. It takes 25 days between the
20 Floral Beauty, Inc., is a large floral arrangements store located in Eastwood Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $17 each. There is an annual demand for 24,000 Bridal Lilies. The manager of Floral Beauty has determined that
21 Cameron Boats, a supplier of boating equipment, sells 5,000 WM-4 diesel engines every year. These engines are shipped to Cameron in a shipping container of 100 cubic feet, and Cameron Boats keeps the warehouse full of these WM-4 motors. The warehouse can hold 5,000 cubic feet of boating
22 Tarbutton Lawn Distributors is a wholesale organization that supplies retail stores with lawn care and household products. One building is used to store FirstClass lawn mowers. The building is 50 feet wide by 40 feet deep by 8 feet high. Andrea Dormer, manager of the warehouse, estimates that
23 Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. She knows that annual demand will be 30,000 units per year and that carrying cost will be $1.50 per unit per year. Ordering cost, on the other hand, can vary
24 Blaine Abrams is the owner of a small company that produces electric scissors used to cut fabric.The annual demand is for 75,000 scissors, and Blaine produces the scissors in batches. On average, Blaine can produce 1,000 pairs of scissors per day during the production process. Demand for
25 Carter Cohen, inventory control manager for Raydex, receives wheel bearings from Wheel &Gears, a small producer of metal parts. Unfortunately, Wheel & Gears can produce only 5,000 wheel bearings per day. Raydex receives 100,000 wheel bearings from Wheel & Gears each year.Because Raydex operates
26 Chandler Manufacturing has a demand for 1,000 pumps each year. The cost of a pump is $50. It costs Chandler Manufacturing $40 to place an order, and the carrying cost is 25% of the unit cost.If pumps are ordered in quantities of 200, Chandler Manufacturing can get a 3% discount on the cost of
27 Arms of Steel is an organization that sells weight training sets. The carrying cost for the AS1 model is $5 per set per year. To meet demand, Arms of Steel orders large quantities of AS1 seven times a year. The stockout cost for AS1 is estimated to be$50 per set. Over the past several years,
28 Victoria Blunt is in charge of maintaining hospital supplies at Mercy Hospital. During the past year, the mean lead time demand for bandage BX-5 was 600. Furthermore, the standard deviation for BX-5 was 70. Ms. Blunt would like to maintain a 95%service level.(a) What safety stock level do you
29 Finn simply does not have time to analyze all the items in his company’s inventory. As a young manager, he has more important things to do. The following is a table of six items in inventory, along with the unit cost and the demand, in units:IDENTIFICATION CODE UNIT COST DEMAND(units)U1 $ 2.00
30 The demand for barbeque grills has been fairly large in the past several years, and Estate Supplies, Inc., usually orders new barbeque grills five times a year. It is estimated that the ordering cost is $60 per order. The carrying cost is $10 per grill per year.Furthermore, Estate Supplies,
31 Omar Haaris receives 5,000 tripods annually from Top-Grade Suppliers to meet his annual demand.Omar runs a large photographic outlet, and the tripods are used primarily with 35mm cameras. The ordering cost is $15 per order, and the carrying cost is $0.50 per unit per year. Weekly demand is 100
32 Amco Convenience Store purchases 500 hammers a year for its inventory from its supplier, who offers pricing at quantity discounts. The quantities and pricing from this supplier are shown in the following table:ORDER QUANTITY UNIT PRICE 0–149 $12.00 150–349 $11.50 350–599 $10.50 600 or more
33 Asbury Products offers the following discount schedule for its 4- by 8-foot sheets of good-quality plywood:ORDER QUANTITY UNIT PRICE 99 sheets or less $18.00 100 to 500 sheets $17.70 More than 500 sheets $17.45 Home Sweet Home Company orders plywood from Asbury Products. Home Sweet Home has an
34 Tropic Citrus Products produces orange juice, grapefruit juice, and other citrus-related items.Tropic obtains fruit concentrate from a cooperative in Orlando that consists of approximately 50 citrus growers. The cooperative will sell a minimum of 100 cans of fruit concentrate to citrus
35 Lindsay Hawkes sells discs that contain 25 software packages that perform a variety of financial functions typically used by business students. Depending on the quantity ordered, Lindsay offers the following price discounts:ORDER QUANTITY PRICE 1 to 600 $10.00 601 to 1,100 $ 9.92 1,101 to 1,550
36 Demand during lead time for one brand of TV is normally distributed with a mean of 56 TVs and a standard deviation of 18 TVs. What safety stock should be carried for a 95% service level?What is the appropriate ROP?
37 Based on available information, lead time demand for CD-ROM drives averages 250 units (normally distributed), with a standard deviation of 25 drives.Management wants a 98% service level. How many drives should be carried as safety stock?What is the appropriate ROP?
38 A product is delivered to Monica’s company once a year. The ROP, without safety stock, is 300 units. Carrying cost is $25 per unit per year, and the cost of a stockout is $80 per unit per year. Given the following demand probabilities during the reorder period, how much safety stock should be
39 Barb’s company has compiled the following data on a small set of products:ITEM ANNUAL DEMAND UNIT COST 1 410 $ 0.75 2 330 $ 17.00 3 300 $ 3.00 4 200 $ 0.90 5 240 $110.00 6 625 $ 0.75 7 85 $ 25.00 8 75 $ 2.00 9 100 $125.00 10 125 $ 1.50 Perform an ABC analysis on her data.
40 The Century One Store has 10 items in inventory, as shown in the following table. The manager wants to divide these items into ABC classifications. What would you recommend?ITEM ANNUAL DEMAND UNIT COST A 1,750 $ 10 B 300 $1,500 C 500 $ 500 D 6,000 $ 10 E 1,000 $ 20 F 1,500 $ 45 G 4,000 $ 12 H
41 Lea Ash opens a new cosmetics store. There are numerous items in inventory, and Lea knows that there are costs associated with inventory.Lea wants to classify the items according to dollars invested in them. The following table provides information about the 10 items that she carries:ITEM NUMBER
42 The following table shows the inventory data for the six items stocked by Apex Enterprises:ITEM CODE UNIT COST ANNUAL DEMAND(units)ORDERING COST CARRYING COST AS A PERCENTAGE OF UNIT COST 1 $150.00 560 $40 15 2 $ 4.10 490 $40 17 3 $ 2.25 500 $50 15 4 $ 10.60 600 $40 20 5 $ 4.00 540 $35 16 6 $
1. Compute the optimal order quantity.Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the exception of speakers, are produced in the Rochester, New York, plant. Speakers used in the assembly of
2. Determine the appropriate ROP (in units).Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the exception of speakers, are produced in the Rochester, New York, plant. Speakers used in the assembly
3. Compute the cost savings that the company will realize if it implements the optimal inventory procurement decision.Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the exception of speakers, are
4. Should procurement costs be considered a linear function of the number of orders?Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the exception of speakers, are produced in the Rochester, New
1 What are the two basic laws of probability?
6 What is Bayes’ theorem, and when can it be used?
13 After evaluating student response to a question about a case used in class, the instructor constructed the following probability distribution:RESPONSE RANDOM VARIABLE, X PROBABILITY Excellent 5 0.05 Good 4 0.25 Average 3 0.40 Fair 2 0.15 Poor 1 0.15 What kind of probability distribution is
14 A student taking Management Science 301 at East Haven University will receive one of five possible grades for the course: A, B, C, D, or E. The distribution of grades over the past two years is shown in the following table.GRADE NUMBER OF STUDENTS A 80 B 75 C 90 D 30 F 25 Total 300 If this past
18 Last year, at Northern Manufacturing Company, 200 people had colds during the year. One hundred fifty-five people who did no exercising had colds, whereas the remainder of the people with colds were involved in a weekly exercise program. Half of the 1,000 employees were involved in some type of
23 Ace Machine Works estimates that the probability their lathe tool is properly adjusted is 0.8. When the lathe is properly adjusted, there is a 0.9 probability that the parts produced pass inspection. If the lathe is out of adjustment, however, the probability of a good part being produced is
24 The Boston South Fifth Street Softball League consists of three teams: Mama’s Boys, team 1; the Killers, team 2; and the Machos, team 3. Each team plays the other teams just once during the season.The win–loss record for the past five years is as follows:WINNER (1) (2) (3)Mama’s Boys (1) X
28 Compute the probability of “loaded die, given that a 3 was rolled,” as shown in Example 7, this time using the general form of Bayes’ theorem from Equation 7.
30 Harrington Health Food stocks 5 loaves of Neutro-Bread. The probability distribution for the sales of Neutro-Bread is listed in the following table:NUMBER OF LOAVES SOLD PROBABILITY 0 0.05 1 0.15 2 0.20 3 0.25 4 0.20 5 0.15 How many loaves will Harrington sell, on average?
33 Refer to Problem 32. What is the probability that sales will be more than 265 boats during the next month? What is the probability that sales will be less than 250 boats next month?
35 Refer to Problem 34. What is the probability that a shaft size will be greater than 0.65 inch? What is the probability that a shaft size will be between 0.53 and 0.59 inch? What is the probability that a shaft size will be under 0.45 inch?
39 Armstrong Faber produces a standard number two pencil called Ultra-Lite. Since Chuck Armstrong started Armstrong Faber, sales had grown steadily.With the increase in the price of wood products, however, Chuck has been forced to increase the price of the Ultra-Lite pencils. As a result, the
40 Patients arrive at the emergency room of Costa Valley Hospital at an average of 5 per day. The demand for emergency room treatment at Costa Valley follows a Poisson distribution.(a) Compute the probability of exactly 0, 1, 2, 3, 4, and 5 arrivals per day.(b) What is the sum of these
41 Using the data in Problem 40, determine the probability of more than 3 visits for emergency room service on any given day.
1. Understand the basic assumptions and properties of linear programming (LP).
2. Use graphical procedures to solve LP problems with only two variables to understand how LP problems are solved.
3. Understand special situations such as redundancy, infeasibility, unboundedness, and alternate optimal solutions in LP problems.
4. Understand how to set up LP problems on a spreadsheet and solve them using Excel’s Solver.
4 Under what condition is it possible for an LP problem to have an unbounded solution?
7 The mathematical relationships that follow were formulated by an operations research analyst at the Smith-Lawton Chemical Company. Which ones are invalid for use in an LP problem? Why?Maximize profit = 4X1 + 3X1X2 + 8X2 + 5X3 subject to the constraints 2X1 + X2 + 2X3 … 50 X1 - 4X2 Ú 6 1.5X21+
8 How do computers aid in solving LP problems today?
10 What are the components of defining a problem in Excel so that it can be solved using Solver?
11 How is the slack (or surplus) calculated for a constraint?How is it interpreted?
12 What is an unbounded solution? How does Solver indicate that a problem solution is unbounded?Problems
13 Solve the following LP problem by using the graphical procedure and by using Excel:Maximize profit = 2X + Y subject to the constraints 3X + 6Y … 32 7X + Y … 20 3X - Y Ú 3 X, Y Ú 0
15 Solve the following LP problem by using the graphical procedure and by using Excel:Maximize profit = 4X + 3Y subject to the constraints 2X + 4Y … 72 3X + 6Y Ú 27-3X + 10Y Ú 0 X, Y Ú 0
19 Solve the following LP problem, which involves three decision variables, by using Excel:Maximize profit = 20A + 25B + 30C subject to the constraints 10A + 15B - 8C … 45 0.51A + B + C2 … A A … 3B B Ú C A, B, C Ú 0
20 Consider the following four LP formulations. Using a graphical approach in each case, determine(a) which formulation has more than one optimal solution.(b) which formulation has an unbounded solution.(c) which formulation is infeasible.(d) which formulation has a unique optimal
22 The Coastal Tea Company sells 60-pound bags of blended tea to restaurants. To be able to label the tea as South Carolina Tea, at least 55% of the tea(by weight) in the bag must be Carolina grown. For quality, Coastal requires that the blend achieve an average aroma rating of at least 1.65.
25 The manufacturer in Problem 24 now has a standing order of 24 model A motors for each production period.Resolve Problem 24 to include this additional constraint.
27 Members of a book club have decided, after reading an investment book, to begin investing in the stock market. They would like to achieve the following:Their investment must grow by at least $6,000 in the long term (over three years) and at least $900 in the short term, and they must earn a
36 The size of the yield of olives in a vineyard is greatly influenced by a process of branch pruning. If olive trees are pruned, trees can be planted more densely, and output is increased. (However, olives from pruned trees are smaller in size.) Obtaining a barrel of olives in a pruned vineyard
37 Cattle are sent to a feedlot to be grain-fed before being processed into beef. The owners of a feedlot seek to determine the amounts of cattle feed to buy so that minimum nutritional standards are satisfied to ensure proper weight gain, while total feed costs are minimized. The feed mix used is
38 The production department for an aluminum valve plant is scheduling its work for next month. Each valve must go through three separate machines during the fabrication process. After fabrication, each valve is inspected by a human being, who spends 15 minutes per valve. There are 525 inspection
41 An electronics corporation manufactures four highly technical products that it supplies to aerospace firms. Each of the products must pass through the following departments before being shipped:wiring, drilling, assembly, and inspection. The time requirement (in hours) for each unit produced,
43 An investor is considering three different television news stocks to complement his portfolio: British Broadcasting Company (BBC), Canadian Broadcasting Company (CBC), and Australian Broadcasting Company (ABC). His broker has given him the following information:SHORT-TERM GROWTH (per$
1. What recommendations should Ron Garcia make, with what justification? Provide a detailed analysis, with charts, graphs, and Excel printouts included.Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge
2. Discuss the need for temporary workers in the drawing department.Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge about the manufacturing process, but he had toured the entire facility, located in
3. Discuss the plant layout.Ron Garcia felt good about his first week as a management trainee at Mexicana Wire Winding, Inc. He had not yet developed any technical knowledge about the manufacturing process, but he had toured the entire facility, located in the suburbs of Mexico City, and had met
1. Formulate an LP problem to determine what blend of the four chemicals will allow Golding to minimize the cost of a 50-pound bag of the fertilizer.Kenneth and Patricia Golding spent a career as a husband-andwife real estate investment partnership in Washington, DC.When they finally retired to a
2. Solve by using Excel to find the best solution.Kenneth and Patricia Golding spent a career as a husband-andwife real estate investment partnership in Washington, DC.When they finally retired to a 25-acre farm in northern Virginia’s Fairfax County, they became ardent amateur gardeners.Kenneth
1. Model a wide variety of linear programming (LP)problems.
2. Understand major business application areas for LP problems, including manufacturing, marketing, finance, employee staffing, transportation, blending, and multiperiod planning.
3. Gain experience in setting up and solving LP problems using Excel’s Solver.
1 A small backpack manufacturer carries four different models of backpacks, made of canvas, plastic, nylon, and leather. The bookstore, which will exclusively sell the backpacks, expects to be able to sell between 15 and 40 of each model. The store has agreed to pay$35.50 for each canvas backpack,
2 A contestant on the hit reality television show Top Bartender was asked to mix a variety of drinks, each consisting of 4 fluid ounces. No other ingredients were permitted. She was given the following quantities of liquor:LIQUOR QUANTITY Bourbon 128 ounces Brandy 128 ounces Vodka 128 ounces Dry
3 A manufacturer of travel pillows must determine the production plan for the next production cycle. He wishes to make at least 300 of each of the three models that his firm offers and no more than 1,200 of any one model. The specifics for each model are shown in the following table. How many

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

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