Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Chapter 4, Problem 122P
Summary Introduction
To determine: The way Company B can minimize the weekly cost of meeting the demand for the processed lumber.
Linear programming:
It is a mathematical modeling procedure were a linear function is maximized or minimized subject to certain constraints. This method is widely useful in making a quantitative analysis which is essential for making important business decisions.
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fi Auto mobile company manufactures cars and trucks. Each vehicle must be processed in the paint shop and body assembly shop. If the paint shop were only painting trucks, then 80 per day could be painted. If the paint shop were only painting cars, then 120 per day could be painted. If the body shop were only producing cars, then it could process 100 per day. If the body shop were only producing trucks, then it could process 100 per day. Each truck contributes GHS60,000 to profit, and each car contributes GHS40,000 to profit. Use linear programming to determine a daily production schedule that will maximize the company’s profits.
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FRUIT COMPUTER COMPANY
Fruit Computer Company manufactures memory chips in batches of ten chips. From past experience, Fruit knows that 80% of all batches contain 10% (1 out of 10) defective chips, and 20% of all batches contain 50% (5 out of 10) defective chips. If a good (that is, 10% defective) batch of chips is sent to the next stage of production, processing costs of $4000 are incurred, and if a bad batch (50% defective) is sent on to the next stage of production, processing costs of $16000 are incurred. Fruit also has the alternative of reworking a batch at a cost of $4000. A reworked batch is sure to be a good batch. Alternatively, for a cost of $400, Fruit can test one chip from each batch in an attempt to determine whether the batch is defective.
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1.Determine a strategy so Fruit can minimize the expected total cost per batch.
2.Compute the EVSI and EVPI.
Chapter 4 Solutions
Practical Management Science
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