A manager of an inventory system believes that inventory models are important decision-making aids. Even though often using an EOQ policy, the manager never considered a backorder model because of the assumption that backorders were inappropriate and should be avoided. However, with upper management's continued pressure for cost ...continues
Operations Research : Stochastic single period model to maximize expected profit.
The management of Alaska Airlines has decided to base its overbooking policy of a stochastic single period model to maximize expected profit. This policy now needs to be implemented on a new flight from Seattle to Atlanta. The aircraft has 125 seats available for a one-way fare of $250. However, since there are commonly a few no ...continues
A product sold by Home Depot, Inc., with an annual demand of 1000 units has Co = $25.50 and Ch = $8. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 25 and σ = 5. a. Determine the recommended order quantity. b. Determine the reorder point and safe ...continues
Myrtle Air Express decided to offer direct service from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle ...continues
Seneca Hill Winery recently purchased land for the purpose of establishing a new vineyard. Management is considering two varieties of white grapes for the new vineyard: Chardonnay and Riesling. The Chardonnay grapes would be used to produce a dry Chardonnay wine, and the Riesling grapes would be used to produce a semi-dry Riesli ...continues
Embassy Publishing Company received a six-chapter manuscript for a new college textbook. The editor of the college division is familiar with the manuscript and estimated a 0.65 probability that the textbook will be successful. If successful, a profit of $750,000 will be realized. If the company decides to publish the textbook an ...continues
The Eastside Manufacturing Company produces four different aircraft components from fabricated sheet metal for several major aircraft companies. The manufacturing process consists of four operations – stamping, assembly, finishing, and packaging. The processing time per unit for each of the operations and total available hours ...continues
Infocomp Systems is a research and development laboratory firm that develops computer systems and software primarily for the medical industry. The laboratory has proposals from its own researchers for eight new projects. Each of the proposed research projects requires limited resources and it is not possible to undertake all ...continues
The Barron Textile Mill in High Point, North Carolina was checked by inspectors enforcing the Occupational Safety and Health Act (OSHA). The inspectors found violations in four categories: hazardous materials, fire protection, hand-powered tools, and machine safety guards. In each category the mill was not in 100% compliance. ...continues
Wal-Mart, a discount store chain, has completed its new store in Rock Springs
Wal-Mart, a discount store chain, has completed its new store in Rock Springs, Maryland. The 150,000 square foot store operates seven days per week and requires the following number of full-time employees working each day of the week. Number of Employees Sunday 47 Monday 22 Tuesday ...continues
