1.

Bracket Manufacturing uses a Kanban system for a component. Daily demand is 1,000 units. Each container has a combined waiting and processing time of 0.90 days. If the container size is 70 and the alpha value () is 12%, how many Kanban card sets should be authorized? Round your answer up to the whole number.

Kanban card set(s)

What is the maximum authorized inventory? Use the rounded value from the previous question. Round your answer to the nearest whole number.

unit(s)

2.

Lou's Bakery has established that JIT should be used for chocolate chips due to the high probability of the kitchen heat melting the chips. The average demand is 150 cups of chocolate chips per week. The average setup and processing time is 1/4 day. Each container holds exactly 3 cups. The current safety stock factor is 10 percent. The baker operates four days per week.

1. How many Kanbans are required for the bakery? Round your answer up to the whole number.

   Kanbans

2. What is the maximum authorized inventory? Use the rounded value from the previous question. Round your answer to the nearest whole number.

   cups

3. If the average setup and processing time is increased to 3/4 of a day due to a process change, how many Kanbans are required for the bakery? Round your answer up to the whole number.

   Kanbans

   What is the maximum authorized inventory under new conditions? Use the rounded value from the previous question. Round your answer to the nearest whole number.

   cups

3.

Southland Corporation's decision to produce a new line of recreational products has resulted in the need to choose one of two automated manufacturing systems based on proposals from two vendors, A and B. The economics of this decision depends on the market reaction to the new product line. The possible long-run demand has been defined as low, medium, or high. Based on detailed financial analyses of system costs as a function of volume and sales under each demand scenario, the following payoff table gives the projected profits in millions of dollars.

	Long-Run Demand
Decision	Low		Medium		High
Vendor A	$240		$320		$370
Vendor B	$70		$320		$670

1. Determine the best decisions using the maximax, maximin, and opportunity loss decision criteria.

   Using the maximax criterion, choose -Select-Vendor A/Vendor B

   Using the maximin criterion, choose -Select-Vendor A/Vendor B

   To minimize the maximum opportunity loss, choose -Select-Vendor A/Vendor B.

2. Assume that the best estimate of the probability of low long-run demand is 0.20, of medium long-run demand is 0.05, and of high long-run demand is 0.75. What is the best decision using the expected value criterion? Round your answers to two decimal places.

   The expected payoff for Vendor A is $ million.

   The expected payoff for Vendor B is $ million.

   Choose -Select-Vendor A/Vendor B