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Assignment 1

Operations research assignment 1 questions

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islam tamim
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5 views

Assignment 1

Operations research assignment 1 questions

Uploaded by

islam tamim
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment# 1

Submission: before next class. Assignment should be hand-written. Convert your


hand-written assignment into a single PDF and then submit to the Google
classroom.

Q1. Suppose that a manager has a choice between the following two mathematical models
of a given situation: (a) a relatively simple model that is a reasonable approximation of the
real situation, and (b) a thorough and complex model that is the most accurate
mathematical representation of the real situation possible. Why might the model described
in part (a) be preferred by the manager?

Q2. The ABC Company has been a producer of picture tubes for television sets and certain
printed circuits for radios. The company has just explained into full scale production and
marketing of AM and AM-FM radios. It has built a new plant that can operate 48 hours per
week. Production of an AM radio in the new plant will require 2 hours and production of an
AM-FM radio will require 3 hours. Each AM radio will contribute Tk. 40 to profits while an AM-
FM radio will contribute Tk. 80 to profits. The marketing departments, after extensive
research, have determined that a maximum of 15 AM radios and 10 AM-FM radios can be
sold each week.

A. What would be the uncontrollable inputs?


B. What would be the decision variables of the mathematical model? The objective
function?
The constraints?
C. Suggest assumptions that could be made to simplify the model.
D. Is the model deterministic or stochastic?
E. Draw the flowchart of the input-output process for this model.

Use Goal-Seek tool if required

Q3. The O'Neill Shoe Manufacturing Company will produce a special-style shoe if the order
size is large enough to provide a reasonable profit. For each special-style order, the
company incurs a fixed cost of $1000 for the production setup. The variable cost is $30 per
pair, and each pair sells for $40.
a. Let x indicate the number of pairs of shoes produced. Develop a mathematical
model for the total cost of producing x pairs of shoes.
b. Let P indicate the total profit. Develop a mathematical model for the total profit
realized from an order for x pairs of shoes.
c. With a demand of 400 pairs of shoes, what is the minimum price per pairs of shoes
that the manufacturer must charge to break even?
Q4. There is a fixed cost of $50,000 to start a production process. Once the process has
begun, the variable cost per unit is $25. The revenue per unit is projected to be $45.
a. Write an expression for total cost.
b. Write an expression for total revenue.
c. Write an expression for total profit.
d. Find the break-even point.

Q5. Eastman Publishing Company is considering publishing a paperback textbook on


spreadsheet applications for business. The fixed cost of manuscript preparation, textbook
design, and production setup is estimated to be $80,000. Variable production and material
costs are estimated to be $3 per book. Demand over the life of the book is estimated to be
4000 copies. The publisher plans to sell the text to college and university bookstores for $20
each.
a. What is the breakeven point?
b. What profit or loss can be anticipated with a demand of 4000 copies?
c. With a demand of 4000 copies, what is the minimum price per copy that the
publisher must charge to break even?
d. If the publisher believes that the price per copy could be increased to $25.95 and
not affect the anticipated demand of 4000 copies, what action would you
recommend? What profit or loss can be anticipated?

Q6. In this portion of an Excel spreadsheet, the user has given values for selling price, the
costs, and a sample volume. Give the cell formula for
a. cell E12, break-even volume.
b. cell E16, total revenue.
c. cell E17, total cost.
d. cell E19, profit/loss.
*

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