Need this by tonight at the latest
1. ______ (23 points) 2. ______ (18 points) 3. ______ (24 points) 1. ______ ( 9 points) 1. ______ (31 points) 1. ______ (13 points) 1. ______ (15 points) 1. ______ (20 points) 1. ______ (16 points) 1. ______ (31 points) Total ______ (200 points) SHOW ALL WORK!!!! Answer Page for Selected Problems Provide only your final answers (for example, the final numbers, selection, etc.) to the following problems. Remember to show your work and answers for these problems on the problem pages. Example only: the break-even point is 100,000 units as this is the point where the cost of the two options is equal. Below that level we prefer option A and above that we would use option C #1 #2 #3 #5 #6 #7 #8 #9 #10 1. (23 points) Airphone, Inc., manufactures cellular telephones at a processing cost of $47 per unit. The company produces an average of 250 phones per week although there are 14% defective phones. Each phone takes one hour to make. At this time, none of the defective phones can be reworked but can be sold as is. Each good phone is sold for $125. The defective phones are sold for parts that provide $14 in revenue per phone. The output is defined as the revenue that the company receives. a) What is the company's labor hours productivity and what is its multifactor productivity? b) Suppose that the company is now able to rework half of the defective phones. It takes an additional 0.3 hours to rework a defective phone. The cost of reworking a defective phone is $15. The reworked phones can be sold for $125 each. After it has started reworking the defective phones that can be reworked, what is the company's labor hours productivity and what is its multifactor productivity? The remaining defective phones that cannot be reworked can still be sold for parts that provides $14 in revenue per phone. c) What is the percent change in the multifactor productivity if the initial process used is the one without the rework capability and is then replaced by the process with the rework capability? 2. (18 points) Doug Moodie is the president of Garden Products Limited. Over the last 5 years, his vice president of marketing has been providing the sales forecast using his special forecasting technique. The actual sales for the past ten years and the forecasts from the vice president of marketing are given below. Year Sales VP/Marketing Forecast 1 170,300 -- 2 168,250 -- 3 165,700 -- 4 169,000 -- 5 168,000 -- 6 167,300 170,000 7 175,250 170,000 8 172,500 180,000 9 156,700 180,000 10 176,300 160,000 Doug wonders if perhaps a weighted moving average or an exponential smoothing approach to forecasting might be better than having the vice president of marketing prepare the forecast. Doug wants to evaluate a three-period weighted moving average with weights of 0.30 and 0.25 for the second most recent and third most recent periods and the remaining weight(s) consistent with how we have used this method this term. He also wants to evaluate the exponential smoothing with an α = 0.30 and a starting forecast for period 3 of 166,000 units. a) Which of the three methods (weighted moving average, exponential smoothing and VP/Marketing) provides the best forecasting method if you were to evaluate these methods based on their forecasting accuracy for Years 8 through 10. Use one of the evaluation methods we have discussed. b) What would be the forecast for Year 11 using both the weighted moving average and the exponential smoothing methods? 3. (24 points) Merrimac Manufacturing has always purchased a certain component part from a supplier on the East Coast for $50 per part. The supplier is reliable and has maintained the same price structure for years. Recent improvements in operations and reduced product demand have cleared up some capacity in Merrimac’s own plant for producing component parts. The particular part in question can be produced internally by Merrimac at $25 per part, with an annual fixed investment of $27,000. a) Over what range (quantity) of product would each of the two options be the preferred one? b) As an alternative, a new supplier located nearby is offering to produce parts on the following cost schedule. For the first 100 parts, the cost is $52 per part. For each part in excess of 100, the cost per unit drops to $46 per part. Considering just the two suppliers, over what range (quantity) of product would each supplier be the preferred one? c) The company is now considering only these two options: the new supplier with the cost information provided in part b) and producing it internally. Considering these two options, over what range (quantity) of product would each option be the preferred one? 4. (9 points) Using an example from your personal or professional life, identify any two of the competitive priorities (dimensions) that conflict with each other that are encountered in your example. Describe a specific example of the trade-offs between these two competitive priorities (dimensions). 5. (31 points) The Older Then Dirt potting soil company uses a machine to fill 500-ounce bags of enriched potting soil. The industry group has set limits on what can be called a 500-ounce bag: a 500-ounce bag of dirt must weigh at least 486 ounces and not more than 514 ounces. The company wants to operate its process at a minimum process capability of 1.30. a) The specification limits have not changed. Suppose that the mean of the process is now 502 ounces with a standard deviation (σ) of 2 ounces. What is the range (upper and lower limits) on the mean of the process to maintain a Cpk of 1.30 or greater? b) Suppose that the company is now operating the process with a mean of 504 ounces and a standard deviation (σ) of 4 ounces. Is the company currently capable of meeting the industry group’s specification standards if the company’s minimum Cpk is 1.30? Explain. If it is not, explain if it is due to a drifting of the mean or too much variability. Explain. c) Now suppose that the company is operating the process with a mean of 504 and continues to use a process capability of 1.30 or greater. What is the maximum acceptable value of the standard deviation (σ) to ensure that the process capability is at least 1.30? d) Suppose that the company can maintain an average weight of 497 ounces and a standard deviation (σ) of 4 ounces. The company does not believe it can improve on these values. The company wants to see if the industry group would be willing to adjust its spec limits rather than keep them at 486 and 514 so that Older then Dirt can meet the minimum Cpk of 1.30. What should the company tell the industry group that the spec limits need to be to achieve a Cpk of 1.30 or greater? Why? 6. (13 points) A toy company has developed a new toy for the upcoming Christmas season. Since this toy is considerably different from the ones it has manufactured previously, the company will need to develop a new production facility for it. Three facility sizes - small, medium and large - are under consideration. Given the nature of the toy market, the company is unsure as to what demand level it will encounter. The preliminary analysis is to be based on the demand being low, average, or high. The accompanying table shows the estimated profits, in $1,000's, of the various facility-size demand combinations. These estimated profit amounts factor in the cost of the operation as well as the time value of money. Demand Level Facility Size Low Average High Small $750 $900 $900 Medium $350 $1,100 $1,300 Large -$250 $1,000 $4,000 The company's initial assessment of the probabilities of the different market sizes is: 1. probability of low = 0.5 1. probability of average = 0.3 1. probability of high = use the probability for this demand level based on the decision tree analysis process a) Draw the decision tree that would help in this analysis. Be sure to indicate all probabilities and payoffs. b) Based on an expected value analysis, what is your recommendation for the facility size that the company should select? Why? 7. (15 points) A medical clinic is considering 3 sites for the location of its new clinic. It has collected the following information. The scores for the non-financial data are on a 0-3 scale with three being best. It is possible to score a 3.0 for any of the factors. Factor Factor Weight Downtown Midtown Suburb Building Cost 0.30 $4.5 million $6 million $5 million Road Access 0.05 1.5 3.0 2.4 Bus Access 0.20 3.0 1.8 1.2 Safety 0.20 1.8 2.4 3.0 Site Size 0.05 2.4 1.2 2.4 Annual Profit 0.20 $3 million $4 million $6 million Using the factor scoring (factor rating) approach as we studied in class, which site do you recommend? Why? 8. (20 points) The Farr-Kroger Classic is a women’s professional golf tournament played each year in Ohio. Listed below are the total purse winnings (the amount of money that is distributed to the top golfers) and the prize for the winner for the 15 years from 2006 through 2020. The operators of this golf tournament believe that there is a relationship between the purse winnings and the prize. There is also a belief that both of these are increasing over time. Year Purse Winnings Prize 2006 $225,000 $33,750 2007 $275,000 $41,250 2008 $325,000 $41,250 2009 $325,000 $48,750 2010 $350,000 $52,500 2011 $400,000 $60,000 2012 $450,000 $67,500 2013 $500,000 $75,000 2014 $500,000 $75,000 2015 $575,000 $86,250 2016 $700,000 $105,000 2017 $800,000 $120,000 2018 $800,000 $120,000 2019 $1,000,000 $150,000 2020 $1,000,000 $150,000 In answering these questions, you