The Ottery Creek Winery produces three kinds of table wine - a blush, a white, and a red. The wineryhas 30,000 pounds of grapes available to produce wine this season. A cask of blush requires 360pounds of grapes, a cask of white requires 375 pounds, and a cask of red requires 410 pounds. Thewinery has enough storage space in its aging room to store 67 casks of wine. The winery has 2,200hours of production capacity, and it requires 14 hours to produce a cask of blush, 10 hours for white,and 18 hours for red. From records of previous years' sales, the winery knows it will sell at leasttwice as much blush as red and at least 1.5 times as much white as blush. The profit for a cask ofblush is $12,100, the profit for white is $8,700, and the profit for a cask of red is $10,500. Thewinery wants to know the number of casks of each type of wine to produce to maximize profit.(Assume that in the production of wine, only whole casks can be produced).What is the maximum profit the Ottery Creek Winery can obtain?1,420,000O 922,220677500O 590,750

Let Blush wine, white wine and red wine be represented by B, W and R respectively. Maximize…

Answered: The Ottery Creek Winery produces three…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 69P: The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon...

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The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
Western Chassis produces high-quality polished steel and aluminum sheeting and two lines ofindustrial chassis for the rack mounting of Internet routers, modems, and other telecommunicationsequipment. The contribution margin (contribution toward profit) for steel sheeting is $0.40 per poundand for aluminum sheeting is $0.60 per pound. Western earns $12 contribution on the sale of aStandard chassis rack and $15 contribution on a Deluxe chassis rack. During the next productioncycle, Western can buy and use up to 25,800 pounds of raw unfinished steel either in sheeting or inchassis. Similarly, 20,400 pounds of aluminum are available. One standard chassis rack requires 16pounds of steel and 8 pounds of aluminum. A Deluxe chassis rack requires 12 pounds of each metal.The output of metal sheeting is restricted only by the capacity of the polisher. For the next productioncycle, the polisher can handle any mix of the two metals up to 4,000 pounds of metal sheeting. Chassismanufacture can be…
The Petoskey Potato Chip Company produces 3 varieties of gourmet potato chip. The varieties and average daily demand are given below: Bar-B-Que: 325 cases/day Sour Cream & Onion: 215 cases/day Classic Cut: 360 ases/day The company runs 24 hours/day and can produce 1,300 cases of potato chips per day. Each case of potato chip costs $20 to produce and Petoskey assumes 18% of this cost as the annual holding cost. It takes Petoskey 5 hours to setup for production of a different variety at a cost of $715. Calculate the minimum cost cycle time in days. Answer: 25.2 How is this calculated?
Lou Silva has owned and operated The Wellness Store for fifteen years. The company's year-end is December 31st. The following chart lists the company's assets owned prior to 2021 and their UCC balances at the end of 2020. Asset UCC Balance Store (building purchased in 2005) $100,000 Delivery van (Class 10) 15,000 Furniture and office equipment (Class 8) 30,000 Photocopier purchased in 2019 (Separate Class 8) 2,000 Patent (purchased in 2018) 10,000 The following transactions took place in 2021: a. Lou purchased $2,000 worth of small tools (each costing under $500). b. The delivery van was sold for $12,000. The original cost was $20,000. A second-hand van was purchased in the year for $16,000. c. $15,000 was paid for an air conditioning system in the building, which was added to the cost of the standard Class 1 pool. d. Lou sold the photocopier for $1,500 in the year, and will replace it in January 2022 with a second-hand model valued…
The MFA Co. Ltd. presently moves pallet loads of cans from production to the truck dock for loading. The loading dock foreman claims that due to increased production the company needs to purchase five new fork trucks and to hire five persons to operate these trucks. Using the present equipment (fork trucks) the maximum load of cans that can be transported is 1500 lb. at a 13.5” load center. The fork truck currently in use is manufacturer - rated for 3,000 lb. at the 24” load center. Question: Can the pallet load capacity be increased? What, if any, new equipment is required?
Production and Materials Purchases Budgets White Corporation’s budget calls for the following sales for next year:Quarter 1 90,000 units Quarter 3 68,000 unitsQuarter 2 76,000 units Quarter 4 96,000 unitsEach unit of the product requires 3 pounds of direct materials. The company’s policy is to begineach quarter with an inventory of product equal to 5% of that quarter’s estimated sales requirementsand an inventory of direct materials equal to 20% of that quarter’s estimated direct materials requirements for production.Required Determine the production and materials purchases budgets for the second quarter.
Because of its labor contract, a company must hire enough labor for 100 units ofproduction per week on one shift or 200 units per week on two shifts. It cannot hire,lay off, or assign overtime. During the fourth week, workers will be available fromanother department to work part or all of an extra shift (up to 100 units). There is aplanned shutdown for maintenance in the second week, which will cut production tohalf. Develop a production plan. The opening inventory is 200 units, and the desiredending inventory is 300 units
HERO Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of pesos) depends on demand as follows: Demand Demand Demand Staffing Options High Medium Low Own staff 352 325 300 Outsider vendor 450 300 150 Combination 400 325 250 If the decision maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using:i. the optimistic approach and the conservative approach iii. the minimax regret approach iv. the Laplace method
LPM Corp. produces and sells two types of frozen burgers, Turkey Burgers and Veggie Burgers. In the most recent month, the firm sold 12,000 Turkey Burgers and 8,000 Veggie Burgers. Turkey Burgers sold for $14.00 per box and variable costs were $7.40 per box. The Veggie Burgers sold for $16.00 per box and variable costs were $8.25 per box. The fixed expenses of the entire company were $41,160. If the sales mix were to shift toward the Turkey Burgers product line with total sales volume remaining constant at 20,000, the overall break-even point for the entire company:
The world's oceans contain on average of 0.9 oz of Au /ton of ocean water. There were 2 proposed novel process in mineral extraction to recover the Au and they were compared using Engineering Economic Analysis. Process X costs $600/ton of ocean water processed and a recovery of 90%, while Process Z costs $450/ton and a recovery of 60%. Both processes will need the same amount of capital investment and equal ounces of Au extracted daily. If the Au today is $2,200/oz, which process is more feasible considering the fact that the world's ocean can be inexhaustible? This problem requires the analysis to be on the basis of profit per ounce of Au extracted.
A barge company moves CoB freight between Memphis and New Orleans. Each barge tow is limited to 15 barges. The round trip takes 6 days. Forecasts call for 37 round trip tows per month. How many towboats does the company need to satisfy this demand? (Assume a month is 30 days.)
Structure Furniture, manufactures coffee tables. Structure Furniture has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month: Output units Machine-hours 30,000tables 8,000hours Direct manufacturing labour-hours 10,000hours Direct materials per unit Direct manufacturing labour per hour Variable manufacturing overhead costs Fixed manufacturing overhead costs Product and process design costs Marketing and distribution costs S100 S12 $322,500 $1,200,000 $900,000 $1,125,000 a) Structure Furniture is approached by an overseas customer to fulfill a one-time-only special order for 1,000 units. All cost relationships remain the same except for a one-time setup charge of $20,000. No additional design, marketing, or distribution costs will be incurred. What is the minimum acceptable bid per unit on this one-time-only special order? b) What is the Structure Furniture full product cost for…

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