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- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
- An online coaching program has been developed for patients with borderline hypertension. A total of 100 patients are randomized to receive the coaching, and 100 patients serve as control subjects. The start-up cost of the coaching program is $2,000 for software, hardware, and office supplies. A part-time nurse is hired for the program, with a salary of $15,000 plus 20% fringe benefits. The cost per year per patient for medication is $1000. It has been shown that for the first year after beginning the program, 90% with coaching were not considered hypertensive (normal or borderline blood pressure) and 10% were prescribed medication to control their blood pressure. In the control group (no coaching), 70% were not considered hypertensive after 1 year and 30% were prescribed blood pressure medication. Patients in the coaching group continue to receive coaching even if they are prescribed medication. Assuming that these probabilities are constant for the next 4 years, and assuming a 3%…An online coaching program has been developed for patients with borderline hypertension. A total of 100 patients are randomized to receive the coaching, and 100 patients serve as control subjects. The start-up cost of the coaching program is $2,000 for software, hardware, and office supplies. A part-time nurse is hired for the program, with a salary of $15,000 plus 20% fringe benefits. The cost per year per patient for medication is $1000. It has been shown that for the first year after beginning the program, 90% with coaching were not considered hypertensive (normal or borderline blood pressure) and 10% were prescribed medication to control their blood pressure. In the control group (no coaching), 70% were not considered hypertensive after 1 year and 30% were prescribed blood pressure medication. Patients in the coaching group continue to receive coaching even if they are prescribed medication. Assuming that these probabilities are constant for the next 4 years, and assuming a 3%…The Aggies will host Tech in this year's homecoming football game. Based on advance ticket sales, the athletic department has forecast hot dog sales as shown in the following table: TT Sales Quantity Probability 1,000 2,000 3,000 4,000 5,000 0.10 0.20 0.30 0.20 0.20 The school buys premium hot dogs for $1.60 and sells them during the game at $2.80 each. Hot dogs left over after the game will be sold for $0.60 each to the Aggie student cafeteria to be used in making hotdog casserole. Use a payoff matrix to determine the number of hot dogs to buy for the game. hot dogs. (Enter your response as an integer.)
- CRUISE MINI CASE: Sunshine Cruise Lines is a cruise operator that offers three- to seven-day cruises along five Caribbean routes. It has developed a reputation as a party cruise operator and the majority of its revenue comes from vacationing college students. This type of customer demand is highly cyclical, and Sunshine finds that repeat purchase is high while its consumers are in college, but practically disappears after graduation. In an effort to encourage its customers to continue taking Sunshine Cruises after they have graduated, the cruise operator has begun offering Adventure Cruises, with port stops on islands known for eco-tourism and biodiversity, both on land and off shore, appealing to young professionals who like to hike and scuba dive or snorkel. In contrast to its party cruises, Sunshine focuses its marketing message for Adventure Cruises on activities at port stops and the convenience of being able to explore several Caribbean destinations from the comfort of a single…The Terraco Motor Company has produced a lightweight, all-terrain vehicle code-named “J99 Terra” for the military. The company is now planning to sell the Terra to the public. It has five plants that manufacture the vehicle and four regional distribution centers. The company is unsure of public demand for the Terra, so it is considering reducing its fixed operating costs by closing one or more plants, even though it would incur an increase in transportation costs. The relevant costs for the problem are provided in the following table. The transportation costs are per thousand vehicles shipped; for example, the cost of shipping 1,000 vehicles from plant 1 to warehouse C is $32,000. Transportation Costs ($1,000s) to Warehouse Annual Production Capacity Annual Fixed Operating Costs From Plant A B C D 1 $56 $21 $32 $65 12,000 $2,100,000 2 18 46 7 35 18,000 850,000 3 12 71 41 52 14,000 1,800,000…The Terraco Motor Company has produced a lightweight, all-terrain vehicle code-named “J99 Terra” for the military. The company is now planning to sell the Terra to the public. It has five plants that manufacture the vehicle and four regional distribution centers. The company is unsure of public demand for the Terra, so it is considering reducing its fixed operating costs by closing one or more plants, even though it would incur an increase in transportation costs. The relevant costs for the problem are provided in the following table. The transportation costs are per thousand vehicles shipped; for example, the cost of shipping 1,000 vehicles from plant 1 to warehouse C is $32,000. Transportation Costs ($1,000s) to Warehouse from plant A B C D Annual Production Capacity Annual Fixed Operation Costs 1 56 21 32 65 12,000 2,100,000 2 18 46 7 35 18,000 850,000 3 12 71 41 52 14,000 1,800,000 4 30 24 61 28 10,000 1,100,000 5 45…
- The principal at Selena Valley High School, Mr John Dixon, is concerned about the school’s enrolment figures for 2018. Until 2010, the school had experienced strong growth, but since 2013 the enrolment numbers for Year 7 have been less than half of what they were in 2010. The Selena Valley is 50 minutes east of Melbourne and has had a recent influx of young families, but prior to this influx it was a small area with solid growth figures. Selena Valley High School is a coeducational institution with strong links to the local area in terms of apprenticeships and vocational education. The enrolment numbers for 2016 were 378 students from Years 7 to 12. Answer the following questions. 1. What is the major issue Selena Valley High School faces as of 2018 in terms of its customer base? 2. Identify whether each of the following factors is part of the internal or external operating environment of Selena Valley High School, and describe the effect each of these could have on the marketing…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: Room Туре І Type II Super Saver $30 Rental Class $20 Deluxe $35 I $30 Business Type I rooms do not have high-speed Internet access and are not available for the Business rental class. Round Tree's management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 140 rentals in the Super Saver class, 60 rentals in the Deluxe class, and 50 rentals in the Business class. Round Tree has 100 Type I rooms and 120 Type II rooms. $40 (a) Use linear programming to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types. Is the demand by…Grand Garden is a hotel with 140 suites. Its regular suite price is $210 per night per suite. The hotel’s total cost per night is $150 per suite and consists of the following. Variable cost $ 110 Fixed cost 40 Total cost per night per suite $ 150 The hotel manager receives an offer to hold the local Bikers’ Club meeting at the hotel in March, which is the hotel’s slow season with a low occupancy rate per night. The Bikers’ Club would reserve 120 suites for one night if the hotel accepts a price of $118 per night.(a) What is the contribution margin from this special offer?(b) Should the Bikers’ Club offer be accepted or rejected?