Answer the questions in Microsoft Word. Each question is worth 10 points and
partial credit will be given. FOR MAXIMUM PARTIAL CREDIT SHOW ALL
1. A radar unit has five critical components. If any one component should
fail, the radar unit would be rendered ineffective. The component
reliabilities are .994, .991, .915, .990, and .972, respectively. What is the
system reliability with redundancy for the third component?
2. Janice Smith is an expert in calligraphy. However, it is found that a
specialized robot can imitate Janice's work perfectly (or at least close
enough). Variable costs are 85% of selling price and fixed costs are
$300,000 for the robot system. How many pieces must be produced by
the robot system to break even if she sells them for $200?
3. State Division of Motor Vehicles (DMV) statistics show the rate of new
driver's license applications to be as shown:
Month Week Applications
November 1 240
December 1 210
Using weights of 1/3 for the most recent week, ¼ for the next most recent
week, ¼ for the third most recent week, and 1/6 for the fourth most recent
week, what is the four period weighted moving average forecast for the
first week in January?
4. Why is high quality so important in manufacturing or services?
5. A company is trying to decide whether to buy a product it uses or to
produce the product itself. It expects to need 80,000 units per year and
has collected the following cost information for three options:
Buy Produce Produce
Product Manually Automated
Fixed Cost NA $225,000 $350,000
Variable Cost $30/unit $20/unit $18/unit
What should the company do? Show any calculations made to decide.
6. Why are we so concerned about achieving high productivity?
7. An electronics company exports personal computers. Their PC sales in
thousands over the past five years are given below:
What is the regression equation if the company wants to use that method
for forecasting sales? Based on the coefficients of correlation and
determination, would you recommend that they use this method? Why, or
8. Explain what line balancing and its goal are.
9. A regional fast-food restaurant is considering an expansion program. The
major factor influencing the success of such a program is the future level
of interest rates. It is estimated that there is a 40 percent chance that
interest rates will increase by 3 percentage points, a 35 percent chance
that they will remain the same, and a 25 percent chance that they will
decrease by 3 percentage points. The alternatives they are considering
and possible payoffs are shown in the following table:
Rates Rates Rates
Increase No Change Decrease
Build 50 new places -$100,000 +$150,000 +$250,000
Build 25 new places -$80,000 +$100,000 +$180,000
Do Nothing -$50,000 +$50,000 +$125,000
Using decision tree analysis, calculate the expected value of each
alternative, and decide which would be the best to follow.
10. The Northwest Flower Company owns a greenhouse, which furnishes
roses and carnations to florists in Oregon, Washington, and Idaho. The
greenhouse can grow any combination of the two flowers. They sell the
flowers in "bunches" with 25 blooms to a bunch. They have up to 10,000
square feet available for planting this year. Each bunch of roses takes
about 4 square feet and each bunch of carnations about 5 square feet.
Special fertilizer is required for flowers; roses need 5 pounds and
carnations 2 pounds. The availability of the fertilizer is limited to 5000
pounds. Sales commitments require the company to grow at least 500
bunches of roses. Profit contributions are $6 per bunch of roses and $8
per bunch of carnations. What is the optimum profit and planting for this