GP 223 Homework | Course Paper

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Letherin Hides is a company that makes boots specifically targeting college students.

Forecasts of sales for the next year are 200 in the summer, 450 in the autumn, and 500

in the winter. Accessories that are used on the boots are purchased from a supplier for

$31.66. The cost of capital is estimated to be 24% per year (or 6% per quarter); thus, the

holding cost per item is 0.06($31.66) = $1.9 per quarter (rounded figure). Letherin

Hides hires freelance art designers at part-time to craft designs during the summer, and

they earn $ 6 per hour. In the autumn, labor is more difficult to keep, and the owner

must pay $6.5 per hour to retain qualified help. Because of the high demand for

part-time help during the winter holiday season, labor rates are higher in the winter, and

workers earn $7.75 per hour. Each boot design takes 2 hours to complete. How should

production be planned over the three quarters to minimize the combined production and

inventory holding costs?

The table below provides information on Letherin Hides boot design cost and

production.

According to the linear optimization model, what is the net production for winter?

A) 0

B) 950

C) 200

D) 500

Below is a decision tree illustrating the R&D process for a new drug.

Let us assume that if market is large, payoff is lognormally distributed with a mean of

$4,900 million and a standard deviation of $1,000 million; if market is medium, payoff

is lognormally distributed with a mean of $2,500 million and a standard deviation of

$500 million; and if market is small, payoff is normally distributed with a mean of

$1,800 million and standard deviation of $200 million. Let us also assume that the cost

of clinical trials is uncertain and estimates are modeled with a triangular distribution

with a minimum of -$ 700 million, a most likely value of – $550 million, and a

maximum of -$500 million. Use 10,000 trials and a random seed of 1.

What is the probability that the drug will not reach the market? [Hint: Choose the

approximate value.]

A) 0.95

B) 0.89

C) 0.77

D) 0.82

Pickson Luthiers Corporation makes four models of electric guitars, ScarCT, Dela Mort,

Warax, and Invazen. Each guitar must flow through five departments, assembly,

painting, sound testing, inspection, and packaging. The table below shows the relevant

data. Production rates are shown in units/hour. (ScarCT is assembled elsewhere).

Pickson wants to determine how many guitars to make to maximize monthly profit.

According to the linear optimization model, which of the following departments uses all

the time that it is allocated to finish its job?

A) assembly

B) painting

C) inspection

D) packaging

While checking for linearity by examining the residual plot, the residuals must:

A) exhibit a linear trend.

B) form a parabolic shape.

C) be randomly scattered.

D) be below the x-axis.

Which of the following is a similarity between a midrange and a mean?

A) Both measures are calculated using all the values in a data set.

B) Both measures are affected by outliers.

C) Both measures divide the data into two equal halves.

D) Both measures can only be used for small sample sizes.

Consider the spreadsheet for a Newsvendor Model.

What is the value of mean absolute deviation?

A) $8.91

B) $5.45

C) $12.35

D) $15.64

Jonathan Reese is considering three stocks in which to invest with a fixed budget. The

table below provides information on Jonathan’s expected returns for each stock. The

table also provides information, collected from market researchers, on the

variance-covariance matrix of the individual stocks. He expects a total return of at least

10%.

Develop a quadratic optimization model to find the optimal allocation of the budget to

each stock, and variance calculations for squared terms and cross-products based on the

variance-covariance matrix.

According to the model, what is the cross-product value for Stock 2 variance?

A) 0.00080

B) -0.00080

C) -0.00075

D) 0.01132

To select a chart type in Excel from the Charts group, which tab has to be accessed?

A) Design tab

B) Layout tab

C) Insert tab

D) Format tab

Stone Age Surfboards is a small manufacturer of two types of popular low-tide

surfboards, the Graystone and the Lava models. The manufacturing process consists of

two departments: fabrication and finishing. The fabrication department has 8 skilled

workers, each of whom works 9.25 hours per day. The finishing department has 5

workers, each of whom works a 6 -hour shift per day. Each pair of Graystone

surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in

finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in

finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the

Graystone model and $60 on the Lava model. The company anticipates selling at least

twice as many Lava models as Graystone models.

Use the spreadsheet below for Stone Age Surfboards to answer the following

question(s) using integer constraints on variables in the optimization models using the

standard Solver.

Which of the following constraints Solver uses?

A) $B$14:$C$14 = integer

B) $D$15 > = $D$6

C) $D$16 > = $D$7

D) $D$19 < = 0

The easiest way to locate a particular function is to select a cell and click on

the Insert function button represented by

A) fx

B) Î£

C) $

D) %

What is the mean absolute deviation obtained from the simulation results?

A) 1.25

B) 0.65

C) 0.24

D) 0.99

The Atlas Movies Theater is planning to reprice their ticket rates to maximize revenues.

They have three classes of tickets: Classic, Silver, and Gold. The table below provides

information on the average ticket sales, revenue and price elasticity on demand. They

have a total seating capacity of 300. The table also provides the price range within

which they plan to reduce their ticket rates.

According to the nonlinear model, which of the following is the projected revenue

figure for Classic tickets based on its new price?

A) $1,314.72

B) $1,116.03

C) $521.68

D) $1,312.52

The ________ is the observation that occurs most frequently.

A) mode

B) mean

C) outlier

D) median

Following is an extract from the database of a construction company. The table shows

the height of walls in feet and the cost of raising them. The estimated simple linear

regression equation is given as Å¶ = b0 + b1X. (Hint: Use Excel functions).

What is the value of the coefficient b1?

A) 86.81704

B) 254.8371

C) 0.010697

D) -2.14625

Below is a payoff table that lists four mortgage options:

What is the average payoff for the 3-year ARM?

A) $ 52,792

B) $ 45,212

C) $ 51,094

D) $ 55,278