(Operations and Supply Chain Management)

1. Suppose that AlwaysRain Irrigation's marketing department will undertake an intense ad campaign for the bronze sprinklers, which are more expensive but also more durable than the plastic ones. Forecast demand for the next four years is

2. A builder has located a piece of property that she would like to buy and eventually build on.  The land is currently zoned for four homes per acre, but she is planning to request new zoning.  What she builds depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities:

Cost of land: $2 million. Probability of rezoning: .60.

If the land is rezoned, there will be additional costs for new roads, lighting, and so on, of $1 million.

If the land is rezoned, the contractor must decide whether to build a shopping center or 1,500 apartments that the tentative plan shows would be possible. If she builds a shopping center, there is a 70 percent chance that she can sell the shopping center to a large department chain for $4 million over her construction cost, which excludes the land; and there is a 30 percent chance that she can sell it to an insurance company for $5 million over her construction cost (also excluding the land). If, instead of the shopping center, she decides to build the 1,500 apartments, she places probabilities on the profits as follows: There is a 60 percent chance that she can sell the apartments to a real estate investment corporation for $3,000 each over her construction cost; there is a 40 percent chance that she can get only $2,000 each over her construction cost. (Both exclude the land cost.)

If the land is not rezoned, she will comply with the existing zoning restrictions and simply build 600 homes, on which she expects to make $4,000 over the construction cost on each one (excluding the cost of land).

Draw a decision tree of the problem and determine the best solution and the expected net profit.

3. Johnson Industries received a contract to develop and produce four high-intensity long-distance receiver/transmitters for cellular telephones. The first took 2,000 labor hours and $39,000 worth of purchased and manufactured parts; the second took 1,500 labor hours and $37,050 in parts; the third took 1,450 labor hours and $31,000 in parts; and the fourth took 1,275 labor hours and $31,492 in parts.

Johnson was asked to bid on a follow-on contract for another dozen receiver/transmitter units. Ignoring any forgetting factor effects, what should Johnson estimate time and parts costs to be for the dozen units? (Hint: There are two learning curves-one for labor and one for parts.)

4. United Research Associates (URA) had received a contract to produce two units of a new cruise missile guidance control. The first unit took 4,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 3,200 hours and cost $21,000 in materials and equipment usage. Labor cost is charged at $18 per hour. The prime contractor has now approached URA and asked to submit a bid for the cost of producing 20 guidance controls. a. What will the last unit cost to build? b. What will be the average time for the 20 missile guidance controls? c.    What will the average cost be for guidance control for the 20 in the contract?

5. Rockness Recycling refurbishes rundown business students. The process uses a moving belt, which carries each student through the five steps of the process in sequence. The five steps are as follows:

One faculty member is assigned to each of these steps. Faculty members work a 40-hour week and rotate jobs each week. Mr. Rockness has been working on a contract from General Eclectic, which requires delivery of 2,000 refurbished students per week. A representative of the human resources department has just called complaining that the company hasn't been receiving the agreed-upon number of students. A check of finished goods inventory by Mr. Rockness reveals that there is no stock left. What is going on?

5. The National State Bank is trying to make sure that they have enough tellers to handle the Friday afternoon rush of workers wanting to cash their paychecks. They are only concerned  with the last hour of the day from 4:00 to 5:00 p.m.   It takes 5 minutes per customer to be processed by the tellers.  The average customer arrivals are shown in the table below.

The bank currently has 8 teller stations, and all are staffed during the Friday afternoon rush hour. 

1. What is the current maximum output at the bank during rush hour?
2. Can the bank process all the customers by 5:00 p.m.?
3. What is the maximum waiting time for customers, and what time period does it occur in?