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(Solved) DMT (Spring 2017) -Second TestInstructions for the Comprehensive Test: Format: Times New Roman, 12pts, 1.5" space, 1" margin (all around),...


This is for situation #6 for the assignment attached. Please follow the instructions and detailed steps. I will post 6 different question for each situation

DMT (Spring 2017)
-Second TestInstructions for the Comprehensive Test:
• Format: Times New Roman, 12pts, 1.5” space, 1” margin (all around), full
justification.
• Name on the upper right corner: only in the first page.
• No cover page (don’t waste a page with logos, big titles, etc., since it counts as
a page.); In other words, start answering on the first page.
• Either English or Spanish: Only one language should be used throughout the
test.
• Don’t write the Situation.
• Maximum of six pages; therefore, only the first six pages will be graded.
• All answers must be explained, justified and written in a statement form.
• It’s to your advantage to include any visual aid in the explanations (graphs,
precedence diagrams, etc.)
• No hand-written material will be acknowledged.
• All assumptions must be written within the answer’s context.
• Write DMT_PUPR_SPRING_2017 in the message subject.
• Send the test as a PDF file.
• There will be penalties for not following these instructions.
• Due date/time: Before 09:00pm, May 20 (No exception).
• Two or more tests that reasonable resemble each other will receive [both] zero.
Situation 1.
JAG Inc. manufactures an electronic device. After reviewing the last nine month’s
sales, and assuming this month sales will be as expected, 810 devices, JAG’s
management is considering to manufacture more devices for June 2017. Due to prior
commitments, the company could not manufacture more than 820 devices. Answer
the following questions (lookout for seasonality).
a) Show and explain, which of the following models is the best (based on MAD)
to forecast June’s demand.
• moving average of n=3,
• simple exponential smoothing with α=0.25, or
• linear regression.
b) Based on the best model, explain if JAG should commit to manufacturing June’s
expected demand?
Month
Aug 16
Sep 16
Oct 16 Sales
550
580
610 Month
Nov 16
Dec 16
Jan 17 Sales
670
600
630 Month
Feb
Mar
Apr Sales
675
650
765 Situation 2 (Note: This is a Monte Carlo simulation problem.)
LatinOrg Inc. sells an organic product made in Costa Rica. Because the time it takes to
receive and order the products, LatinOrg places an order every two weeks. The
number of products ordered is the difference between the actual on-hand inventory
at the end of the week that the order is made and 100, the maximum allowed amount.
It cost $50 to place and received an order, $4 each product, and $1/week to keep the
product in the store. The product sells for $12. The historical information of on-hand
inventory at the time an order is made is as showed.
On-hand
inventory
15
25
35
40
42
55 Probability
.12
.25
.35
.20
.06
.02 a) Simulating 60 weeks, what is the estimated average order size (show your data
or calculations)?
b) Based on the simulation, what is the average total cost of “having” the product?
Situation 3.
LatinOrg is in the process of reassessing the inventory policy of another product.
There is an average demand of 90 products/month, and the company makes an order
each month for the same amount. Each product cost $25, and each order cost $60. The
holding cost is $4 per product per month.
a) Does LatinOrg have a sound inventory policy? Explain.
b) Based on “sound policy,” if any, that LatinOrg should have, what should be
LatinOrg inventory policy for this product if the supplier offers the following
discounts
- orders between 90-110 (9%)
- orders between 120-140 (12%)
- orders of at least 141 (15%)
Situation 4.
A local firm is deciding on the number of temporary workers to hire. The options are
hiring 3,4,5,6 or 7. Hiring a temporary worker will have benefits for the company that
will depend on the amount hired, the synergy created, and market conditions. The
following scenarios have been developed by management to assess the amount to hire,
where the amount shows a success rating for having the corresponding number of
temporary workers under each market condition. # Workers
3
4
5
6
7 Low Market
Conditions
90
95
65
75
80 Medium Market
Conditions
75
70
95
75
90 High Market
Conditions
65
15
90
65
95 a) Based on the maximin criterion, how many new workers should be hired?
b) Based on the minimax regret criterion, how many new workers should be
hired?
c) If the firm thinks the chances of low, medium and high compliance are 35%,
40%, and 25% respectively, how many new workers should be hired, what
is the expected “value” of perfect information?
Situation 5.
JPR believes they will need the aggregate capacity amounts shown in Table 1 during
the next six years. The company has a choice of building and operating manufacturing
plants with the specification shown in Table 2. Suppose that at the beginning of year
1, plants 1-4 have been constructed and are in operations. At the beginning of each
year, the company may shut down a plant that is operating or reopen a shut-down
plant. The costs associated with reopening or shutting down a plant are shown in
Table 3. Formulate, show (standard form), solve and explain a model that optimize
the total costs of meeting the required capacity for the next six years. Year
1
2
3
4
5
6 Plant
1
2
3
4 Table 1
Capacity (tons)
90
120
140
160
180
200 Table 2
Construction
Capacity (tons)
Cost ($
millions)
50
16
70
18
45
15
30
10 Annual
Operating Cost
($ millions)
1.8
2
1.6
1.2 Plant
1
2
3
4 Table 3
Reopening cost
($ millions)
2.1
2.2
1.8
0.9 Shutdown cost
($ millions)
1.9
1.8
1.5
0.75 Situation 6.
A company is deciding which of two processes to implement. Both processes will
satisfy the same requirement for the next five years. Process 1 implementation cost is
$3000 and has a maintenance yearly cost of $400. Process 2 implementation cost is
$4500, and its maintenance cost is random: 35% chance it will be $300, 45% it will be
$375, and 20% it will be $500. Before the implementation is made, the company can
have a specialist evaluate the reliability of each process. If the specialist believes that
Process 2 is highly reliable, there is a 60% chance that its annual maintenance cost will
be $0, and a 40% chance it will be $375. If the specialist believes that Process 2 is
unreliable, there is a 20% chance that the annual maintenance cost will be $0, a 40%
chance it will be $375, and a 40% chance it will be $500. Assume the specialist charges
$200 for his/her assessment, explain what should be the company’s decision.

 


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