Homework: Quantitative Analysis
Part 1
Choose 7 of the following to answer:
i. As a self-study exercise, complete the self-test at the end of each chapter. Use the key at the back of the book to correct your answers. Re-study pages for any items you answer incorrectly.
ii. List and describe the features of EOQ and ABC.
iii. List and describe the types of carrying costs and ordering costs?
iv. What is the ROP? How is it determined?
v. What is the purpose of sensitivity analysis?
vi. What is the objective of JIT?
vii. Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost), and the ordering cost per order is $18.75. There are 250 working days per year.
• What is the EOQ?
• Given the EOQ, what is the average inventory? What is the annual inventory holding cost?
• In minimizing cost, how many orders would be placed each year? What would be the annual ordering cost?
• Given the EOQ, what is the total annual inventory cost (including purchase cost)?
• What is the time between orders?
• What is the ROP?
viii. Jan Gentry is the owner of a small company that produces electric scissors used to cut fabric. The annual demand is 8,000 scissors, and Jan produces the scissors in batches. On average, Jan can produce 150 scissors per day, and during the production process, demand for scissors has been about 40 scissors per day. The cost to set up the production process is $100, and it costs Jan 30 cents to carry one pair of scissors for one year. How many scissors should Jan produce in each batch?
ix. The EOQ model has several assumptions. List them and explain whether they are readily attainable.
Part 2
Choose 6 of the following to answer:
i. As a self-study exercise, complete the self-test at the end of each chapter. Use the key at the back of the book to correct your answers. Re-study pages for any items you answer incorrectly.
ii. What are the conditions causing linear programming problems to have multiple solutions?
iii. Do you prefer the corner point method or the isoprofit, isocost method? Why?
iv. Explain the purpose and procedures of the simplex method.
v. What is a shadow price? How does the concept relate to the dual of an LP problem? How does it relate to the primal?
vi. Electrocomp's management realizes that it forgot to include two critical constraints (see Problem 7-14). In particular, management decides that there should be a minimum number of air conditioners produced in order to fulfill a contract. Also, due to an oversupply of fans in the preceding period, a limit should be placed on the total number of fans produced.
a. If Electrocomp decides that at least 20 air conditioners should be produced but no more than 80 fans should be produced, what would be the optimal solution? How much slack or surplus is there for each of the four constraints?
b. If Electrocomp decides that at least 30 air conditioners should be produced but no more than 50 fans should be produced, what would be the optimal solution? How much slack or surplus is there for each of the four constraints at the optimal solution?
vii. Management of Sundown Rent-a-Car (see Problem 8.8) has decided that perhaps the cost during the six- month period is not the appropriate cost to minimize because the agency may still be obligated to additional months on some leases after that time. For example, if Sundown had some cars delivered at the beginning of the sixth month, Sundown would still be obligated for two additional months on a three-month lease. Use LP to determine how many cars should be leased in each month on each type of lease to minimize the cost of leasing over the entire life of these leases.
viii. Assume that you will set your production (of products or services) according to the results of a linear programming solution. What else is needed to assure financial success?
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.