1: Suppose the company has identified the following three possible demand scenarios: Demand (Units per year) Probability 25,000 0.3 60,000 0.4 100,000 0.3 1. If the capacity is set at 80,000, how much of a capacity cushion is here? What is the capacity utilization? 2. What is the probability of idle capacity if the capacity is 80,000? 3. If it costs $25 per units lost business and $50 to build a unit of capacity, how much capacity should be built to minimize total cost?

1: Suppose the company has identified the following three possible demand scenarios: Demand (Units per year) Probability 25,000 0.3 60,000 0.4 100,000 0.3 1. If the capacity is set at 80,000, how much of a capacity cushion is here? What is the capacity utilization? 2. What is the probability of idle capacity if the capacity is 80,000? 3. If it costs $25 per units lost business and $50 to build a unit of capacity, how much capacity should be built to minimize total cost?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 12P

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31 please help me please!A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 19,200 units output each month. However, it has an absolute maximum output capability of 23,000 units per month, and can produce as little 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 13,280 units ir October, what is the capacity utilization rate in October for this factory? Note: Round your answer to 1 decimal place.
An airline company must plan its fleet capacity and long-term schedule of aircraft usage. For oneflight segment, the average number of customers per day is 70, which represents a 65 percentageutilization rate of the equipment assigned to the flight segment. If demand is expected toincrease to 84 customers for this flight segment in three years, and management requires acapacity cushion of 25 percent, calculate the following: i. the planned capacity requirement. ii. the maximum number of customers the flight segment can accommodate.iii. the efficiency rate of the flight segment assuming that the current effective capacity of theflight segment is 93 customers.
A biotech firm is considering abandoning its old plant, built 23 years ago, andconstructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and its capacity in terms of standardizedproduction units is 250,000 units per year. The capacity of the new laboratoryis to be 400,000 units per year. During the past 23 years, costs of laboratoryconstruction have risen by an average of 5% per year. If the cost-capacity factor, based on square footage, is 0.80, what is the estimated cost of the newlaboratory?
Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.
Problems 2 Helen Murvis, hospital administrator for Portland General Hospital, is trying to determine whether to build a large wing onto the existing hospital, a small wing, or no wing at all. If the population of Portland continues to grow, a large wing could return $150,000 to the hospital each year. If the small wing were built, it would return S$60,000 to the hospital each year if the population continues to grow. If the population of Portland remains the same, the hospital would encounter a loss of $85,000 if the large wing were built. Furthermore, a loss of $45,000 would be realized if the small wing were constructed and the population remains the same. Unfortunately, Helen does not have any information about the future population of Portland * Develop a decision table for this problem. * Determine the best decision using the following decision criteria 1. Мaximax 2. Маximin 3. Minimax Regret Hurwicz (use a coefficient of realism of 0.75) 5. Equal likelihood 6. Expected Value 7.…
Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.Draw a…
What is done if there is an unbalanced between demand and capacity?
A telephone company have a production capacity of 500,000 units per month. At its present capacity of350,000 units per month, the company have monthly income of ₱350,000,000. The company has a fixed cost of ₱100,000,000 per month and a variable cost of ₱200 per unit.a. What is the present profit or loss in millions of pesos?b. What is the break-even quantity?c. If the production is increased to 80% of its capacity, what is the profit or loss in millions of pesos
What do you understand by capacity planning? Explain the decision tree modeling for capacity expansion
Differentiate between design capacity and capacity utilization. Briefly describe three capacity expansion strategies. An airline company must plan its fleet capacity and long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percentage utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 84 customers for this flight segment in three years, and management requires a capacity cushion of 25 percent, calculate the following:- the planned capacity requirement. the maximum number of customers the flight segment can accommodate. the efficiency rate of the flight segment assuming that the current effective capacity of the flight segment is 93 customers.
. Suppose a manager is using maximum EMV as a basis for making a capacity decision and, in the process, obtains a result in which there is a virtual tie between two of the seven alternatives. How is the manager to make a decision?
EMV APPLIED TO CAPACITY DECISION Southern Hospital Supplies, a company that makes hospital gowns, is considering capacity expansion.APPROACH: c Southern’s major alternatives are to do nothing, build a small plant, build a medium plant, or build a large plant. The new facility would produce a new type of gown, and currently the po-tential or marketability for this product is unknown. If a large plant is built and a favorable market ex-ists, a profit of $100,000 could be realized. An unfavorable market would yield a $90,000 loss. However, a medium plant would earn a $60,000 profit with a favorable market. A $10,000 loss would result froman unfavorable market. A small plant, on the other hand, would return $40,000 with favorable marketconditions and lose only $5,000 in an unfavorable market. Of course, there is always the option of doingnothing.Recent market research indicates that there is a .4 probability of a favorable market, which meansthat there is also a .6 probability of an…