Questions and Answers of Managerial Decision Modeling Business Analytics With Spreadsheet

22 Sales of industrial vacuum cleaners at Overholt Supply Co. over the past 13 months were as follows:(a) Using a moving average with three periods, determine the demand for vacuum cleaners for next
26 Commuter ridership in Athens, Greece, during the summer months is believed to be heavily tied to the number of tourists visiting the city. During the past 12 years, the data in the table at the
31 Charles Brandon is thinking about investing in the Purple Arrow Company, which makes central air conditioning units. The company has been in business for over 50 years, and Charles believes it is
32 Thirteen students entered the undergraduate business program at Longstreet College two years ago.The table near the top of the next column indicates what their GPAs were after they were in the
33 Sruti Singh is shopping for a used Volkswagen Golf and feels that there is a relationship between the mileage and market value of the car. The following table provides data on previous car sales
35 Callaway College is a small business school that offers an MBA program. The main entrance criterion for admission to the MBA program is the Common Business Admission Test (CBAT) score. The
37 Kurt’s Hardware Store advertises and sells snow blowers each season. The following table provides the annual demand, level of advertising, in dollars, and snowfall, in inches, for the past eight
38 Kurt’s Hardware Store (see Problem 37) would like to investigate the effect of adding annual snowfall to the regression model. The table in Problem
37 includes the annual snowfall (in inches) for the past eight years.(a) Develop a multiple regression model to predict the demand for snow blowers based on the advertising budget and the amount of
39 The Fowler Martial Arts Academy trains young boys and girls in self-defense. Joan Fowler, the owner of the academy, notes that monthly revenue is higher when school is in session but quite low
40 In addition to his day job as an engineer, Luis Garcia runs a small ethnic grocery store. The shop stocks food items from southeast Asian countries and caters to the large population of people
41 The GNP for each quarter of the past four years is shown in the following table:YEAR QUARTER GNP (billions)1 1 $ 9,027 2 $ 9,092 3 $ 9,194 4 $ 9,367 2 1 $ 9,505 2 $ 9,588 3 $ 9,726 4 $ 9,938 3 1
42 Using the data from Problem 41, forecast the GNP for each quarter of year 5 by using the multiplicative decomposition model. What is the MAPE value for this model?
43 The average price per gallon of gasoline in major U.S. cities for each month during a three-year period are shown in the following table:MONTH YEAR 1 YEAR 2 YEAR 3 January $2.972 $3.301 $3.472
44 Using the data from Problem 43, forecast the average gasoline price for each month in year 4 by using the multiplicative decomposition model. What is the MAPE value for this model?
45 Quarterly sales figures for the Cavill Pump Company, in thousands, for the past four years are shown in the following table:QUARTER YEAR 1 YEAR 2 YEAR 3 YEAR 4 1 $263 $312 $283 $319 2 $300 $323
47 The following table shows the quarterly demand, in thousands of cases, for a national beer distributor over the past 4 years:QUARTER YEAR 1 YEAR 2 YEAR 3 YEAR 4 1 294 335 433 280 2 499 507 516 524
1. Understand the importance of inventory control.
2. Use inventory control models to determine how much to order or produce and when to order or produce.
3. Understand inventory models that allow quantity discounts.
4. Understand the use of safety stock with known and unknown stockout costs.
5. Understand the importance of ABC inventory analysis.
6. Use Excel to analyze a variety of inventory control models.
1 Why is inventory an important consideration for managers?
2 What is the purpose of inventory control?
4 Describe the major decisions that must be made in inventory control.
5 What are some of the assumptions made in using the EOQ?
7 What is the ROP? How is it determined?
8 What is the purpose of sensitivity analysis?
9 What assumptions are made in the EPQ model?
10 What happens to the EPQ model when the daily production rate becomes very large?
11 In the quantity discount model, why is the carrying cost expressed as a percentage of the unit cost, I , instead of the cost per unit per year, Ch ?
12 Briefly describe what is involved in solving a quantity discount model.
13 Discuss the methods that are used in determining safety stock when the stockout cost is known and when the stockout cost is unknown.
14 Briefly describe what is meant by ABC analysis.What is the purpose of this inventory technique?
15 Shakina Harris, who works in her brother’s hardware store, is in charge of purchasing. Shakina has determined that the annual demand for #6 screws is 150,000 and is fairly constant over the 200
16 Neha Shah is the purchasing agent for a firm that sells industrial valves and fluid control devices.One of the most popular valves is the KA1, which has an annual demand of 6,000 units. The cost
17 Keith Smart has been in the building business for most of his life. Keith’s biggest competitor is Delta Birch. Through many years of experience, Keith knows that the ordering cost for an order
18 Shoes R Us is a local shoe store located in Camden.Annual demand for a popular sandal is 1,000 pairs of sandals, and Gary Cole, the owner of Shoes R Us, has been in the habit of ordering 200 pairs
19 Annual demand for the Dobbs model airplane kit is 80,000 units. Albert Dobbs, president of Dobbs’Terrific Toys, controls one of the largest toy companies in Nevada. He estimates that the
20 Floral Beauty, Inc., is a large floral arrangements store located in Eastwood Mall. Bridal Lilies, which are a specially created bunch of lilies for bridal bouquets, cost Floral Beauty $17 each.
21 Cameron Boats, a supplier of boating equipment, sells 5,000 WM-4 diesel engines every year. These engines are shipped to Cameron in a shipping container of 100 cubic feet, and Cameron Boats keeps
22 Tarbutton Lawn Distributors is a wholesale organization that supplies retail stores with lawn care and household products. One building is used to store FirstClass lawn mowers. The building is 50
23 Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. She knows that annual demand will be 30,000 units per year
24 Blaine Abrams is the owner of a small company that produces electric scissors used to cut fabric.The annual demand is for 75,000 scissors, and Blaine produces the scissors in batches. On average,
25 Carter Cohen, inventory control manager for Raydex, receives wheel bearings from Wheel &Gears, a small producer of metal parts. Unfortunately, Wheel & Gears can produce only 5,000 wheel bearings
26 Chandler Manufacturing has a demand for 1,000 pumps each year. The cost of a pump is $50. It costs Chandler Manufacturing $40 to place an order, and the carrying cost is 25% of the unit cost.If
27 Arms of Steel is an organization that sells weight training sets. The carrying cost for the AS1 model is $5 per set per year. To meet demand, Arms of Steel orders large quantities of AS1 seven
28 Victoria Blunt is in charge of maintaining hospital supplies at Mercy Hospital. During the past year, the mean lead time demand for bandage BX-5 was 600. Furthermore, the standard deviation for
29 Finn simply does not have time to analyze all the items in his company’s inventory. As a young manager, he has more important things to do. The following is a table of six items in inventory,
30 The demand for barbeque grills has been fairly large in the past several years, and Estate Supplies, Inc., usually orders new barbeque grills five times a year. It is estimated that the ordering
31 Omar Haaris receives 5,000 tripods annually from Top-Grade Suppliers to meet his annual demand.Omar runs a large photographic outlet, and the tripods are used primarily with 35mm cameras. The
32 Amco Convenience Store purchases 500 hammers a year for its inventory from its supplier, who offers pricing at quantity discounts. The quantities and pricing from this supplier are shown in the
33 Asbury Products offers the following discount schedule for its 4- by 8-foot sheets of good-quality plywood:ORDER QUANTITY UNIT PRICE 99 sheets or less $18.00 100 to 500 sheets $17.70 More than 500
34 Tropic Citrus Products produces orange juice, grapefruit juice, and other citrus-related items.Tropic obtains fruit concentrate from a cooperative in Orlando that consists of approximately 50
35 Lindsay Hawkes sells discs that contain 25 software packages that perform a variety of financial functions typically used by business students. Depending on the quantity ordered, Lindsay offers
36 Demand during lead time for one brand of TV is normally distributed with a mean of 56 TVs and a standard deviation of 18 TVs. What safety stock should be carried for a 95% service level?What is
37 Based on available information, lead time demand for CD-ROM drives averages 250 units (normally distributed), with a standard deviation of 25 drives.Management wants a 98% service level. How many
38 A product is delivered to Monica’s company once a year. The ROP, without safety stock, is 300 units. Carrying cost is $25 per unit per year, and the cost of a stockout is $80 per unit per year.
39 Barb’s company has compiled the following data on a small set of products:ITEM ANNUAL DEMAND UNIT COST 1 410 $ 0.75 2 330 $ 17.00 3 300 $ 3.00 4 200 $ 0.90 5 240 $110.00 6 625 $ 0.75 7 85 $
40 The Century One Store has 10 items in inventory, as shown in the following table. The manager wants to divide these items into ABC classifications. What would you recommend?ITEM ANNUAL DEMAND UNIT
41 Lea Ash opens a new cosmetics store. There are numerous items in inventory, and Lea knows that there are costs associated with inventory.Lea wants to classify the items according to dollars
42 The following table shows the inventory data for the six items stocked by Apex Enterprises:ITEM CODE UNIT COST ANNUAL DEMAND(units)ORDERING COST CARRYING COST AS A PERCENTAGE OF UNIT COST 1
1. Compute the optimal order quantity.Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the
2. Determine the appropriate ROP (in units).Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles. All parts of the sound systems, with the
3. Compute the cost savings that the company will realize if it implements the optimal inventory procurement decision.Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in
4. Should procurement costs be considered a linear function of the number of orders?Sturdivant Sound Systems manufactures and sells stereo and CD sound systems in both console and component styles.
1 What are the two basic laws of probability?
6 What is Bayes’ theorem, and when can it be used?
13 After evaluating student response to a question about a case used in class, the instructor constructed the following probability distribution:RESPONSE RANDOM VARIABLE, X PROBABILITY Excellent 5
14 A student taking Management Science 301 at East Haven University will receive one of five possible grades for the course: A, B, C, D, or E. The distribution of grades over the past two years is
18 Last year, at Northern Manufacturing Company, 200 people had colds during the year. One hundred fifty-five people who did no exercising had colds, whereas the remainder of the people with colds
23 Ace Machine Works estimates that the probability their lathe tool is properly adjusted is 0.8. When the lathe is properly adjusted, there is a 0.9 probability that the parts produced pass
24 The Boston South Fifth Street Softball League consists of three teams: Mama’s Boys, team 1; the Killers, team 2; and the Machos, team 3. Each team plays the other teams just once during the
28 Compute the probability of “loaded die, given that a 3 was rolled,” as shown in Example 7, this time using the general form of Bayes’ theorem from Equation 7.
30 Harrington Health Food stocks 5 loaves of Neutro-Bread. The probability distribution for the sales of Neutro-Bread is listed in the following table:NUMBER OF LOAVES SOLD PROBABILITY 0 0.05 1 0.15
33 Refer to Problem 32. What is the probability that sales will be more than 265 boats during the next month? What is the probability that sales will be less than 250 boats next month?
35 Refer to Problem 34. What is the probability that a shaft size will be greater than 0.65 inch? What is the probability that a shaft size will be between 0.53 and 0.59 inch? What is the probability
39 Armstrong Faber produces a standard number two pencil called Ultra-Lite. Since Chuck Armstrong started Armstrong Faber, sales had grown steadily.With the increase in the price of wood products,
40 Patients arrive at the emergency room of Costa Valley Hospital at an average of 5 per day. The demand for emergency room treatment at Costa Valley follows a Poisson distribution.(a) Compute the
41 Using the data in Problem 40, determine the probability of more than 3 visits for emergency room service on any given day.
1. Understand the basic assumptions and properties of linear programming (LP).
2. Use graphical procedures to solve LP problems with only two variables to understand how LP problems are solved.
3. Understand special situations such as redundancy, infeasibility, unboundedness, and alternate optimal solutions in LP problems.
4. Understand how to set up LP problems on a spreadsheet and solve them using Excel’s Solver.
4 Under what condition is it possible for an LP problem to have an unbounded solution?
7 The mathematical relationships that follow were formulated by an operations research analyst at the Smith-Lawton Chemical Company. Which ones are invalid for use in an LP problem? Why?Maximize
8 How do computers aid in solving LP problems today?
10 What are the components of defining a problem in Excel so that it can be solved using Solver?
11 How is the slack (or surplus) calculated for a constraint?How is it interpreted?
12 What is an unbounded solution? How does Solver indicate that a problem solution is unbounded?Problems
13 Solve the following LP problem by using the graphical procedure and by using Excel:Maximize profit = 2X + Y subject to the constraints 3X + 6Y … 32 7X + Y … 20 3X - Y Ú 3 X, Y Ú 0
15 Solve the following LP problem by using the graphical procedure and by using Excel:Maximize profit = 4X + 3Y subject to the constraints 2X + 4Y … 72 3X + 6Y Ú 27-3X + 10Y Ú 0 X, Y Ú 0
19 Solve the following LP problem, which involves three decision variables, by using Excel:Maximize profit = 20A + 25B + 30C subject to the constraints 10A + 15B - 8C … 45 0.51A + B + C2 … A A
20 Consider the following four LP formulations. Using a graphical approach in each case, determine(a) which formulation has more than one optimal solution.(b) which formulation has an unbounded
22 The Coastal Tea Company sells 60-pound bags of blended tea to restaurants. To be able to label the tea as South Carolina Tea, at least 55% of the tea(by weight) in the bag must be Carolina grown.
25 The manufacturer in Problem 24 now has a standing order of 24 model A motors for each production period.Resolve Problem 24 to include this additional constraint.
27 Members of a book club have decided, after reading an investment book, to begin investing in the stock market. They would like to achieve the following:Their investment must grow by at least
36 The size of the yield of olives in a vineyard is greatly influenced by a process of branch pruning. If olive trees are pruned, trees can be planted more densely, and output is increased. (However,
37 Cattle are sent to a feedlot to be grain-fed before being processed into beef. The owners of a feedlot seek to determine the amounts of cattle feed to buy so that minimum nutritional standards are

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