The online portion of the assignment is found in Myola.
1. Consider a firm with a plant in the U.S and the U.K. A U.K.- based shipper charges L0.50 per unit to ship between the two countries. Assume no taxes, and consider the4 following data.
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U.S.
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U.K.
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Weekly Demand
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13,000
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24,000
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Weekly Capacity
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18,000
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32,000
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Sales Price
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£30
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£25
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Production Cost
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£7
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£5
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a. Suppose that the exchange rate is 1.00 = $1.60. What is the best production and distribution plan, i.e. how much should be made in each country, and how much should be shipped between countries?
b. Given your plan in part a. what is the profit in each country (expressed in dollars)?
2. Consider a process with an upper spec limit of 69.5 grams, a lower spec limit of 62 grams, and a mean of 67 grams.
a. If the standard deviation is 1 gram, is the process "capable?"
b. If the standard deviation is 2 grams, is the process "capable?"
3. Consider a normally distributed process that cuts wood with a "process center" of 18 inches and a standard deviation of .08 inches. The tower specification limit is 17.75 inches, and the upper specification limit is 18.18 inches.
A piece of wood that is cut too short must be scrapped at a cost of $22.00. A piece of wood that is cut too long must be re-cut by hand at a cost of $45.50. The firm runs 20,000 pieces of wood through the machine per day and works 350 days per year. What is the annual expected fixing cost of this process?