1. Simon Mall
Simons mall has 10000 square feet of space to rent and wants to determine the types of stores that should occupy the mall. The minimum number and maximum number of each type of store are given in the spreadsheet. The annual profit made by each type of store depends on how many stores of that type are in the mall. This dependence is given in the same file. For example, if two department stores are in the mall each department store will ear 210000 profits per year, each store pays 5% of its annual profit as rent to Simons. Determine how Simon can maximize its rental income from the mall.
You cannot use Excel's conditional variables. Letting solver decided how many to select, means you would need one. If 2 jewelry stores, then profit is $160,000. Instead use a binary decision variable for each option. No hint this time, but I will tell you that all store types are used at least once.
Don't forget you need to submit your model and memo.
2. Quality Problem
Identify the difference between shifts.
You should recognize this as data suitable for x-bar and range charts. Please use the Table on page 107 and formulas on page 106 for any control charts you decide to construct. The case also provides the specification limits (4.9 to 5.1) so you also have the data to compute Cp and Cpk.
From here on, you have to determine what charts you are going to make and what indices should be computed. Remember your goal is to discover if there is a problem, and if so, when it started. I expect that you may create several charts that you never turn in as you experiment with what best tells this quality story and would help this firm save the account.
3. Inventory Problem
In inventory language this is known as hoarding, buying today in anticipation of price increases or unavailability in the future. To really make a good decision, we have to consider the opportunity cost of capital because money can be tied up in inventory and not available to use elsewhere. You don't have to create a model for this assignment. I have provided W&A's model for the Subway Token Hoarding Case.
Use this as your framework. I know that many of you are finance majors and might take exception to some ways that W&A have modeled the problem. One thing that frequently bugs students is that in this problem the assumption is made that daily interest rate is based on the 250 days that the tokens are used, but that really isn't daily compounding! Many students change that to 365! I am indifferent to minor changes, but check with me if you are going to make major changes. And you certainly don't have to make any changes.
I would like you to consider the following hoarding problem:
You manage the inventory for a large firm and use 50 widgets a day that cost $100 each. Your supplier calls you and tells you to place a large order today, because the cost is going to increase to $125 per unit tomorrow. If you get your order in by close of business today, you can lock in the $100 per widget cost. You estimate that your cost of capital is 7%.
Submit a worksheet that answers Questions 1 and 2 from the Case. This isn't hard, you just enter the new data and run Solver for the hoarding part and enter zero in the target cell for the 'no hoard' part. You can answer them just like the author's model: a textbox in worksheet showing the answer.
Then, instead of answering the other Case questions, I would like you to perform the following sensitivity analysis: How does the number to purchase change with changes in daily demand? In a textbox explain this and provide a graph to support your answer. (Hint: Look at what the objective cell is very carefully.)
Finally provide a textbox with a short (200 words max) paragraph telling me what else you would consider before making the decision to hoard inventory.
4.
A philanthropist has given the Business School a huge endowment to reward the most deserving graduating MBA/MS student. One award will be given each year consisting of a cash award of $250K. You are one of the student representatives on the task force to decide the criteria for selecting the student.
A huge disagreement has arisen in defining "most deserving," with some believing it is the one with the biggest financial need, that is the student who needs the money the most. Others see "deserving" as being the one who accomplished the most, measuring something like the best GPA. In fact, each member of the committee has several ways to define "most deserving." In a search to combine many variables without identifying which are more important than others, you suggest a DEA model. Your rationale for using an "efficiency" model is that one can find inputs, i.e., student characteristics that existed when students entered the program and outputs, i.e., student characteristics that are present when the student is ready to graduate. "Most deserving" could be defined at the student who uses the fewest inputs to make the most outputs.
The goal is to provide a framework that can be used year after year, with as little influence of politics or favoritism as possible. It should also be easy to implement. A dumb example for an input variable would be incoming weight of the student, unless we could make a case that this characteristic is important to the process (maybe it represents the stored energy to fuel the long nights of study.) Outputs are things we expect to see when the process is done, or the results of the process. Percent hair loss would be a dumb example--but I do get some students who complain that the modeling assignments have made them pull out their hair! Remember high numbers have to be good, so if you are using something where high is bad, be sure you indicate that a reverse scoring would be needed.
The inputs and outputs must be quantifiable, but be creative and do some exploration. How about something like "professionalism" as an output? Google "scale for professionalism" and you'll find more than a few to choose from. To earn full credit, you must identify at least one of these more "creative" variables. You will need to include the link of the scale you are going to use to measure this.
- Provide 2 input variables that you would like to see in this model and explain why. (You can't use incoming weight.)
- Provide 2 output variables that you like to see in this model and explain why. (You can't use hair loss.)
- Provide a pro and a con for using DEA to determine "The Most Deserving" master's graduate for this significant gift.
Create and submit a document file that addresses these three points, limit 600 words.
Attachment:- Problems.rar