Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
13th Edition
ISBN: 9780135225899
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Question
Chapter 7.S, Problem 37P
Summary Introduction
To determine: The machine that should be recommended by TS person using the present value method.
Introduction:
Present value (PV):
It is the value that is in present form of money in contrast to some future amount. This is achieved when it is invested in compound interest.
The NPV is the measurement of profit that is calculated by subtracting the present values of
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A machine was purchased one year ago. Presently, the market value is $16,000 and it declines by $3,000 every
year. For the next 3 years, the maintenance costs are as follows:
Year Maintenance costs
1
$890
$1,290
$1,690
2
3
What is the marginal cost of extending the service for the 3rd
year?
A. $2,690
В. $5,490
C. $4,690
D. $5,690
1. Decision Rules.
A company is choosing a motorized mechanism for a new toy, a dancing ballerina
(TippiToes) that is currently under development. Demand is uncertain. but the
company is confident that demand will be: Light (25,000 units), Moderate (100,000
units) or Heavy (150,000) units.
The payoff table for each mechanism (in $) is given below.
Action: Choice of Mechanism
Event
Gears and Levers
Spring
Weights and Pulleys
Pneumatic
Light
25,000
-10,000
-125,000
-300,000
Moderate
400,000
440,000
400,000
300,000
Heavy
650,000
740,000
750,000
700,000
Questions:
(1) Apply Maximax, Maximin, Minimax Regret, and EMV rules (assuming that the
probability of Light demand is 0.1, Moderate demand is 0.7, and Heavy
demand is 0.2) to decide what mechanism should the company choose?
(2) What is the expected value of perfect information?
(3) Draw a decision tree to solve this problem.
A manager is trying to decide whether to buy one machine ortwo. If only one machine is purchased and demand provesto be excessive, the second machine can be purchased later.Some sales would be lost, however, because the lead timefor delivery of this type of machine is 6 months. In addition,the cost per machine will be lower if both machines are pur-chased at the same time. The probability of low demand isestimated to be 0.30 and that of high demand to be 0.70. Theafter-tax NPV of the benefits from purchasing two machinestogether is $90,000 if demand is low and $170,000 if demandis high.If one machine is purchased and demand is low, the NPV is$120,000. If demand is high, the manager has three options:(1) doing nothing, which has an NPV of $120,000; (2) subcon-tracting, with an NPV of $140,000; and (3) buying the secondmachine, with an NPV of $130,000.a. Draw a decision tree for this problem.b. What is the best decision and what is its expected payoff?
Chapter 7 Solutions
Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
Ch. 7.S - Prob. 1DQCh. 7.S - Prob. 2DQCh. 7.S - Prob. 3DQCh. 7.S - How is actual, or expected, output computed?Ch. 7.S - Explain why doubling the capacity of a bottleneck...Ch. 7.S - Distinguish between bottleneck time and throughput...Ch. 7.S - Prob. 7DQCh. 7.S - Prob. 8DQCh. 7.S - Prob. 9DQCh. 7.S - Prob. 10DQ
Ch. 7.S - Explain how net present value is an appropriate...Ch. 7.S - Prob. 12DQCh. 7.S - What are the techniques available to operations...Ch. 7.S - Amy Xias plant was designed to produce 7,000...Ch. 7.S - For the past month, the plant in Problem S7.1,...Ch. 7.S - If a plant has an effective capacity of 6,500 and...Ch. 7.S - Prob. 4PCh. 7.S - Material delays have routinely limited production...Ch. 7.S - Prob. 6PCh. 7.S - Southeastern Oklahoma State Universitys business...Ch. 7.S - Under ideal conditions, a service bay at a Fast...Ch. 7.S - A production line at V. J. Sugumarans machine shop...Ch. 7.S - A work cell at Chris Ellis Commercial Laundry has...Ch. 7.S - The three-station work cell Illustrated in Figure...Ch. 7.S - The three-station work cell at Pullman Mfg., Inc....Ch. 7.S - The Pullman Mfg., Inc., three-station work cell...Ch. 7.S - Klassen Toy Company, Inc., assembles two parts...Ch. 7.S - Prob. 15PCh. 7.S - Prob. 16PCh. 7.S - Markland Manufacturing intends to increase...Ch. 7.S - Using the data in Problem S7.17. a. What is the...Ch. 7.S - Given the data in Problem S7.17, at what volume...Ch. 7.S - Janelle Heinke, the owner of HaPeppas!, is...Ch. 7.S - Prob. 21PCh. 7.S - Prob. 22PCh. 7.S - Prob. 23PCh. 7.S - Prob. 24PCh. 7.S - Prob. 25PCh. 7.S - As a prospective owner of a club known as the Red...Ch. 7.S - Prob. 27PCh. 7.S - James Lawsons Bed and Breakfast, in a small...Ch. 7.S - Prob. 33PCh. 7.S - Prob. 34PCh. 7.S - Prob. 35PCh. 7.S - What is the present value of 5,600 when the...Ch. 7.S - Prob. 37PCh. 7.S - Prob. 38PCh. 7.S - Bolds Gym, a health club chain, is considering...Ch. 7.S - Prob. 1VCCh. 7.S - Prob. 2VCCh. 7.S - Prob. 3VCCh. 7 - What is process strategy?Ch. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - What is process redesign?Ch. 7 - Prob. 5DQCh. 7 - Name the tour quadrants of the service process...Ch. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Identify manufacturing firms that compete on each...Ch. 7 - Identify the competitive advantage of each of the...Ch. 7 - Prob. 11DQCh. 7 - Identify the competitive advantage of each of the...Ch. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Prob. 15DQCh. 7 - Explain what a flexible manufacturing system (FMS)...Ch. 7 - Prob. 17DQCh. 7 - Prob. 18DQCh. 7 - Prepare a flowchart tor one of the following: a....Ch. 7 - Prob. 14PCh. 7 - Prepare a time-function map for one of the...Ch. 7 - Prepare a service blueprint for one of the...Ch. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Prob. 4PCh. 7 - Prob. 5PCh. 7 - Ski Boards, Inc., wants to enter the market...Ch. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Using Figure 7.6 in the discussion of value-stream...Ch. 7 - Metters Cabinets, Inc., needs to choose a...
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