Assignment:
Q1. Bearkats Inc. manufactures two home appliances: a microwave and a coffee maker. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each microwave takes 3 hours of wiring and 2 hours of drilling. Each coffee maker goes through 2 hours of wiring and 1 hour of drilling. During the next production period, 240 hours of wiring time and 140 hours of drilling time are available. Each microwave sold has a profit of $25 and each coffee maker sold has a profit of $15.
a) Formulate this problem as a linear program to determine the best combination of the 2 product that yields the highest profit. Include the objective, decision variables, and constraints.
b) Solve the problem presented in part (a) using Microsoft Excel solver.Remember to upload your Excel file and label the objective function, constraints and decision variablecells clearly in your file.
Q2. Write the constraint described by each of the following statements. Variable terms should all be on the left side of the constraint followed by the correct inequality or equality symbol and the right side should be a numeric value. I recommend using the Equation tool in Word under the Insert tab.
a) The total production of x1 and x2 must be no more than 50 units.
b) The quantity of Y must be at least five times as large as one-half the quantity of Z.
c) The ratio of x1 to x2 can be no more than 3 to 2.
d) The quantity of M must be no more than one-half as large as P and Q combined.
e) The production of must be at least 6 more than twice the production of .
Q3. A firm produces three products in a repetitive process facility. Product A sells for $50; its variable costs are $25. Product B sells for $180; its variable costs are $70. Product C sells for $30; its variable costs are $20. The firm has annual fixed costs of $340,000. Last year, the firm sold 1200 units of A, 2500 units of B, and 12,000 units of C.
a) Calculate the break-even point of the firm.
b) The firm has some idle capacity at these volumes, and chooses to cut the selling price of A from $50 to $40, believing that its sales volume will rise from 1200 units to 2400 units. What is the revised break-even point?
Q4. Identify the four basic process strategies, and describe each in a grammatically correct and complete sentence (or two) each.
Q5. Using the appropriate model (EOQ or EPQ) answer the following questions:
a) In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, will the EOQ value increase or decrease and by what percentage?
b) A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is?
c) A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The lead-time is doubling from 2 days to 4 days, what is the impact to the economic order quantity? Why?
d) In the basic EPQ model, if the cost of holding a unit of inventory for a year doubles, and all other values remain constant, will the EPQ value increase or decrease and by what percentage?
e) A production order quantity problem has a daily demand rate = 10 and a daily production rate = 40. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?
Q6. The new office supply discounter, Paper Clips, Etc. (PCE), sells a certain type of ergonomically correct office chair that costs $400. The annual holding cost rate is 40% of the item cost, annual demand is 1200 units, and the ordering cost is $25 per order. The lead time is 8 days. Because demand is variable (standard deviation of daily demand is 2.4 chairs), PCE has decided to establish a customer service level of 90% (Z=1.28). The store is open 300 days per year.
a) What is the optimal order quantity?
b) What is the safety stock?
c) What is the reorder point?
Q7. The Huntsville Tire Center sells 20,000 go-cart tires per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20 per tire if fewer than 500 tires are ordered, $18 per tire if 500 or more-but fewer than 1,000-tires are ordered, and $17 per tire if 1,000 or more tires are ordered.
- How many tires should the Tire Center order each time it places an order?
- What is the total cost of this policy?
Q8. A Houston based computer accessories manufacturing firm is adopting kanbans for its computer monitor subassembly line. Determine the size of the Kanban for the subassembly line and the number of kanbans needed based on the data below:
- Setup cost = $30
- Annual Holding Cost = $120 per monitor subassembly.
- Daily production = 20 monitors subassemblies.
- Annual Usage = 2,500 (50 weeks * 5 days each * daily usage of 10 subassemblies)
- Lead time = 16 days
- Safety stock = 4 days' production of subassemblies
Q9. Differentiate between a push and a pull system. When should an organization use each system?
Q10. A repetitive manufacturing firm is planning on level material use. The following information has been collected. Currently, the firm operates 250 days per year.
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Annual demand
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22,000
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Daily demand
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88
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Daily production
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250
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Desired lot size (2 hours of production)
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63
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Holding cost per unit per year
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$40
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a) What is the setup cost, based on the desired lot size?
b) What is the setup time, based on $40 per hour setup labor?
Provide complete and step by step solution for the question and show calculations and use formulas.