Practical Management Science 4th Edition Wayne L. Winston, S. Christian Albright - Solutions

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In the Indiana MBA program we need to divide a class of 60 students into 10 six-person teams. In the interest of diversity, we have the following goals (listed in descending order of importance):■ At least one woman per team■ At least one member of a minority per team■ At least one student
You have been hired as a consultant to help design a new airport in northern Indiana that will supplant O’Hare as Chicago’s major airport. Discuss the objectives you consider important in designing and locating the airport.
You are planning to renovate a hospital. How would you use AHP to help determine what improvements to include in the renovation?
A company is considering buying up to five other businesses. Given knowledge of the company’s view of the trade-off between risk and return, how could trade-off curves be used to determine the companies that should be purchased?
At the beginning of the six-month period, 30 units of product 2 are in inventory.■ During the next six months, Wivco has 1000 hours for production available. At the end of the next six months, Wivco incurs a 10% holding cost on the value of ending inventory (measured relative to production cost).
At the beginning of the six-month period, 60 units of product 1 are in inventory.■ During the next six months, at most 175 units of product 2 can be sold on a cash basis, and at most 250 units of product 2 can be sold on a credit basis.It costs $45 to produce each unit of product 2, and each
Based on Sartoris and Spruill (1974). Wivco produces two products, which it sells for both cash and credit.Revenues from credit sales will not have been received but are included in determining profit earned during the current six-month period. Sales during the next six months can be made either
You are the mayor of Gotham City and you must determine a tax policy for the city. Five types of taxes are used to raise money:■ Property taxes. Let p be the property tax rate.■ A sales tax on all items except food, drugs, and durable goods. Let s be the sales tax rate.■ A sales tax on
At Lummins Engine Corporation, production employees work 10 hours per day, four days per week. Each day of the week, at least the following number of employees must be working: Monday through Friday, seven employees;Saturday and Sunday, three employees. Lummins has set the following goals, listed
You are trying to determine which city to live in.New York and Chicago are under consideration. Four objectives will determine your decision: housing cost, cultural opportunities, quality of schools and universities, and crime level. The weight for each objective is in the file P16_39.xlsx. For
Goal 1 is to minimize the sum of deviations from this requirement.■ Goal 2: For the benchmark jobs referred to in the file P16_38.xlsx, the actual point total for each job should come as close as possible to the point total listed in the table. Goal 2 is to minimize the sum of the absolute
A job’s hourly salary equals half its point total. IU has two goals (listed in order of priority) in setting up the points given to each level of each job factor.■ Goal 1: When increasing the level of a factor by 1, the points should increase by at least
Jobs at Indiana University are rated on three factors:■ Factor 1: Complexity of duties■ Factor 2: Education required■ Factor 3: Mental and/or visual demands For each job at IU, the requirement for each factor has been rated on a scale of 1 to 4, with a 4 in factor 1 representing high
A hospital outpatient clinic performs four types of operations. The profit per operation, as well as the minutes of X-ray time and laboratory time used, are given in the file P16_37.xlsx. The clinic has 500 private rooms and 500 intensive care rooms. Type 1 and type 2 operations require a patient
Productco produces three products. Each product requires labor, lumber, and paint. The resource requirements, unit price, and variable cost (exclusive of labor, lumber, and paint) for each product are given in the file P16_36.xlsx. At present, 900 labor hours, 1550 gallons of paint, and 1600 board
BeatTrop Foods is trying to choose one of three companies to merge with. Seven factors are important in this decision:■ Factor 1: Contribution to profitability■ Factor 2: Growth potential ■ Factor 3: Labor environment ■ Factor 4: R&D ability of company ■ Factor 5: Organizational fit ■
Stockco fills orders for three products for a local warehouse.Stockco must determine how many of each product should be ordered at the beginning of the current month. This month, 400 units of product 1, 500 units of product 2, and 300 units of product 3 will be demanded. The cost and space taken up
The Pine Valley Board of Education must hire teachers for the coming school year. The types of teachers and the salaries that must be paid are given in the file P16_33.xlsx. For example, 20 teachers who are qualified to teach history and science have applied for jobs, and each of these teachers
Based on Lin et al. (1984). You have been hired by Arthur Ross to determine which of the following accounts receivable methods should be used in an audit of the Keating Five and Dime Store: analytic review (method 1), confirmations (method 2), or test of subsequent collections (method 3). The three
A consumer is trying to determine which type of frozen dinner to eat. She considers three attributes to be important: taste, nutritional value, and price.Nutritional value is considered to be determined by cholesterol and sodium level. Three types of dinners are under consideration. The pairwise
You are trying to determine which of two secretarial candidates (John or Sharon) to hire. The three objectives that are important to your decision are personality, typing ability, and intelligence. You have assessed the pairwise comparison matrix for the three objectives in the file P16_30.xlsx.
You are trying to determine which MBA program to attend. You have been accepted at two schools:Indiana and Northwestern. You have chosen three attributes to use in helping you make your decision:cost, starting salary for graduates, and ambience of school (can we party there?). Your pairwise
In determining where to invest your money, two objectives, expected rate of return and degree of risk, are considered to be equally important. Two investments(1 and 2) have the pairwise comparison matrices shown in the file P16_28.xlsx.a. How would you rank these investments?b. Now suppose another
You are ready to select your mate for life and have determined that physical attractiveness, intelligence, and personality are key factors in selecting a satisfactory mate. Your pairwise comparison matrix for these objectives is shown in the file P16_27.xlsx. Three people (Chris, Jamie, and Pat)
Your company is about to purchase a new PC. Three objectives are important in determining which computer you should purchase: cost, user friendliness, and software availability. The pairwise comparison matrix for these objectives is shown in the file P16_26.xlsx.Three computers are being considered
Each professor’s annual salary increase is determined by his or her performance in three areas: teaching, research, and service to the university. The administration has assessed the pairwise comparison matrix for these objectives as shown in the file P16_25.xlsx. The administration has compared
The portfolio optimization example from Chapter 7 (see Example 7.9) found the efficient frontier by minimizing portfolio variance, with a lower bound constraint on the expected return. Do it the opposite way. That is, calculate the efficient frontier by maximizing the expected return, with an upper
In the capital budgeting example from Chapter 6 (see Example 6.1), we maximized NPV for a given budget.Now find a trade-off curve for NPV versus budget.Specifically, minimize the amount invested, with a lower bound constraint on the NPV obtained. What lower bounds should you use? Do you get the
GMCO produces three types of cars: compact, medium, and large. The variable cost per car and production capacity (per year) for each type of car are given in the file P16_22.xlsx. The annual demand for each type of car depends on the prices of the three types of cars, also given in this file. In
If a company spends a on advertising (measured in thousands of dollars) and charges a price of p dollars per unit, then it can sell 1000 10p 20a12 units of the product. The cost per unit of producing the product is $6. Construct a trade-off curve between the objectives of maximizing profit and
Plantco produces three products. Three workers work for Plantco, and the company must determine which product(s) each worker should produce. The number of units each worker would produce if he or she spent the whole day producing each type of product is given in the file P16_20.xlsx. The company is
Widgetco produces two types of widgets. Each widget is made of steel and aluminum and is assembled with skilled labor. The resources used and the per-unit profit contribution (ignoring cost of overtime labor purchased) for each type of widget are given in the file P16_19.xlsx. At present, 200
Based on Vasko et al. (1987). Bethlehem Steel can fill orders using five different types of steel molds. Up to three different molds of each type can be purchased.Each individual mold can be used to fill up to 100 orders per year. Six different types of orders must be filled during the coming year.
Based on Klingman and Phillips (1984). The Marines need to fill three types of jobs in two cities (Los Angeles and Chicago). The numbers of jobs of each type that must be filled in each city are shown in the file P16_17.xlsx. The Marines available to fill these jobs have been classified into six
The HAL computer must determine which of eight research and development (R&D) projects to undertake.For each project, four quantities are of interest: (1) the net present value (NPV, in millions of dollars) of the project; (2) the annual growth rate in sales generated by the project; (3) the
A new president has just been elected and has set the following economic goals (listed from highest to lowest priority):■ Goal 1: Balance the budget (this means revenues are at least as large as costs).■ Goal 2: Cut spending by at most $150 billion.■ Goal 3: Raise at most $550 billion in
A small aerospace company is considering eight projects:■ Project 1: Develop an automated test facility.■ Project 2: Bar code all inventory and machinery.■ Project 3: Introduce a CAD/CAM system.■ Project 4: Buy a new lathe and deburring system.■ Project 5: Institute an FMS (Flexible
The amounts of available land (in thousands of square feet) at sites 2 through 5 are given in the file P16_13.xlsx. The cost of building each facility (in thousands of dollars), the annual maintenance cost (in thousands of dollars) for each facility, and the land(in thousands of square feet)
Based on Taylor and Keown (1984). Gotham City is trying to determine the type and location of recreational facilities to build during the next decade. Four types of facilities are under consideration: golf courses, swimming pools, gymnasiums, and tennis courts. Six sites are under consideration. If
Lucy’s Music Store at present employs five full-time employees and three part-time employees. The normal workload is 40 hours per week for full-time employees and 20 hours per week for part-time employees. Each full-time employee is paid $6 per hour for work up to 40 hours per week and can sell
Globots can be produced by regular-time labor or by overtime labor. Production capacity (number of globots) and production costs during the next four quarters are shown in the file P16_11.xlsx. Wivco has set the following goals in order of importance:■ Goal 1: Each quarter’s demand should be
During the next four quarters, Wivco faces the following demands for globots: quarter 1, 13; quarter 2, 14;quarter 3, 12; quarter 4,
Based on Lee and Moore (1974). Faber College is admitting students for the class of 2007. Data on its applicants are shown in the file P16_10.xlsx. Each row indicates the number of in-state or out-of-state applicants with a given SAT score who plan to be business or nonbusiness majors. For example,
The city of Bloomington has 17 neighborhoods. The number of high school students in each neighborhood and the time required to drive from each neighborhood to each of the city’s two high schools (North and South) are listed in the file P16_09.xlsx. The Bloomington Board of Education needs to
There are four teachers in the Faber College Business School. Each semester, 200 students take each of the following courses: Marketing, Finance, Production, and Statistics. The “effectiveness” of each teacher in teaching each course is given in the file P16_08.xlsx.Each teacher can teach a
Based on Welling (1977). The Touche Young accounting firm must complete three jobs during the next month. Job 1 will require 500 hours of work, job 2 will require 300 hours, and job 3 will require 100 hours. At present, the firm consists of five partners, five senior employees, and five junior
Based on Steuer (1984). Deancorp produces sausage by blending beef head, pork chuck, mutton, and water.The cost per pound, fat per pound, and protein per pound for these ingredients are listed in the file P16_06.xlsx. Deancorp needs to produce 1000 pounds of sausage and has set the following goals,
Each week, Stockco produces two products. Relevant information for each product is shown in the file P16_05.xlsx. Stockco has a goal of $4800 in weekly profit and incurs a $1 penalty for each dollar it falls short of this goal. A total of 3200 hours of labor are available. A $2 penalty is incurred
Hiland Appliance must determine how many TVs and Blu-Ray disc players to stock. It costs Hiland $1000 to purchase a TV and $400 to purchase a Blu-Ray player.A TV requires three square yards of storage space, and a Blu-ray disc player requires one square yard. The sale of a TV earns Hiland a profit
Fruit Computer Company is ready to make its annual purchase of computer chips. Fruit can purchase chips(in lots of 100) from three suppliers. Each chip’s quality is rated as excellent, good, or mediocre. During the coming year, Fruit needs 5000 excellent chips, 3000 good chips, and 1000 mediocre
The average time(in minutes) it takes for an ambulance to respond to a call from district 1 is 40 3x1; for district 2, the time is 50 4x2. Gotham City has three goals (listed in order of priority):■ Goal 1: At most $100,000 per year should be spent on ambulance service.■ Goal 2: Average
Gotham City must determine how to allocate ambulances during the next year. It costs $5000 per year to run an ambulance. Each ambulance must be assigned to one of two districts. Let xi be the number of ambulances assigned to district i, i 1,
For each set of priorities of goals, solve the Burnit problem and verify that the values in Figure 16.7 are correct.
One problem with our Excel implementation of the CPM method is that the maximum and minimum formulas for the earliest start time and the latest finish times have to be tailored to the specific AON network.That is, you can’t enter formulas for a typical activity and then copy them down for the
Consider a project with six activities. The CPM method has already been implemented, with the results shown in the file P15_38.xlsx. (All times are in months.) This file also shows the number of workers of type A, the number of workers of type B, and the material costs per month for each of the
Now create a table with weeks along the top and projects along the side. Each entry in the table should indicate how many hours are spent on each project each week. IF functions work here. Finally, create one more table with weeks along the top and managers along the side and use SUMIF functions,
Based on LeBlanc et al. (2000). A construction company has eight project managers and has 14 projects scheduled for the next 12 weeks. Each project must be assigned a project manager. The start and finish week for each project as well as the hours per week each project manager would need to spend
Real-world projects often have milestones where costs are incurred or payments are received. Usually the costs are incurred relatively early, and the payments are received relatively late. Because of the time value of money, it is advantageous to incur the costs as late as possible and receive the
In the previous problem, all of Tom’s activities have fixed durations. Now assume they have PERT distributions with the parameters listed in the file P15_35.xlsx.a. Use @RISK to simulate this project. What is the mean length of time required to complete the project?What is the probability that it
The main concern is when he will complete the project, given that he works only on weekdays. The work proceeds in stages, labeled A through J, as summarized in the table in the file P15_34.xlsx. Three of these activities, wiring, plumbing, and duct work, will be done by separate independent
To complete an addition to the Business Building, the activities in the file P15_33.xlsx must be completed(all times are in months). Assume that all activity times are normally distributed with the means and standard deviations given in the file. The project is completed after Room 111 has been
To build Indiana University’s new law building, the activities in the file P15_32.xlsx must be completed(all times are in months). Assume that all activity times are normally distributed with the means and standard deviations given in the file.a. Estimate the probability that the project will
The city of Bloomington is about to build a new water treatment plant. After the plant is designed (D), we can select the site (S), the building contractor (C), and the operating personnel (P). After the site is selected, we can erect the building (B).We can order the water treatment machine (W)
When an accounting firm audits a corporation, the first phase of the audit involves obtaining knowledge of the business. This phase of the audit requires the activities listed in the file P15_30.xlsx.a. Draw the AON project network and determine the critical path and the minimum number of days
Horizon Cable is about to expand its cable TV offerings in Smalltown by adding MTV and other stations.The activities listed in the file P15_29.xlsx must be completed before the service expansion can be completed.Draw the AON project network and find the critical path and the minimum number of weeks
A company is planning to manufacture a product that consists of three parts, labeled A, B, and C. The company anticipates that it will take five weeks to design the three parts and determine the way in which these parts must be assembled to make the final product.Then the company estimates that it
Consider the (simplified) list of activities and predecessors that are involved in building a house, as shown in the file P15_27.xlsx.a. Draw an AON project network and find the critical path and the minimum number of days needed to build the house. Also, create the associated Gantt chart.b.
The promoters of a rock concert in Indianapolis must perform the tasks shown in the file P15_26.xlsx before the concert can be held. (All durations are in days.) Draw theAONproject network. Then find the critical path and the minimum number of days needed to prepare for the concert, and create the
Before a new product can be introduced at Kehls, the activities shown in the file P15_25.xlsx must be completed, where all times are in weeks.a. Draw the AON project network and determine a critical path and the minimum number of weeks required before the new product can be introduced.b. The
A company has a project that consists of 11 activities, described in the file P15_24.xlsx. Draw an AON project network and then find the critical path and the minimum number of days required to complete this project. Also, create the associated Gantt chart.
What is the mean of this distribution?What are the corresponding values of 1 and2 for the equivalent beta distribution? According to the online help for the generalized beta distribution, its mean is min [1(1 2)] (max min). Does this evaluate to the same mean that you got for the PERT
Most of the literature in project scheduling with uncertain activity times advocates the use of the beta distribution for activity times. This is a continuous distribution with four parameters: a minimum, a maximum, and two parameters 1 and 2 that control the shape of the distribution. (@RISK
You saw in Chapter 10 how to introduce correlation into an @RISK simulation with RISKCORRMAT functions. We implicitly assumed that the activity durations in Example 15.5 are probabilistically independent.However, it is very possible that some of them would be correlated in a real
We indicated in Example 15.5 that the mean project length from the simulation is greater than the project length of 62 days from substituting the mean activity durations (the ones used in earlier sections). Note that the PERT distributions we used in the example, with the exception of activity D,
In the model in Example 15.5, suppose bonuses and penalties are incurred for earliness or lateness.Specifically, suppose a bonus of $2000 is received if the project is completed within 60 days, an extra bonus of$1000 is received if the project is completed within 58 days, and a penalty of $1000 is
Starting with a project schedule where some activities are noncritical, is it ever optimal to crash any of these noncritical activities to meet a given deadline? The idea is that as you keep crashing to meet a tighter and tighter deadline, a noncritical activity could conceivably become critical,
In the Monitoring People sheet of the Project Monitoring.xlsx file, we created five tables of daily costs, one for each type of people, and we created a chart for all of these. In each table, the start times were the earliest start times. As an alternative, do the following. Delete the bottom four
Then, for example, the cost of reducing the duration of activity H from 12 days to 9 days is c(3) 300(3)2 $2700. Modify the Project Crashing Linear.xlsx model to accommodate this quadratic function, and then optimize to meet a deadline of 54 days. (You can still assume that activity H can be
This function produces the “increasing cost per day” behavior frequently seen. To try it out in Example 15.3, suppose the crashing cost for activity H, wiring offices, exhibits this quadratic behavior, with c
In the crashing model in Example 15.3, we assumed that the cost per day crashed is constant. This is often unrealistic. For example, it might cost $300 to decrease the duration of an activity from 10 days to 9 days, but it might cost $450 to reduce it from 9 days to 8 days. One possible way to
In the model in Example 15.4, suppose each project consists of two activities and the second activity for each project cannot begin until the first activity is completed. Assuming the two activities for a given project could require different numbers of employees, how would you modify the model
Suppose the projects in Example 15.4 are apartment units and the profit is the monthly rent earned from each apartment unit. Assume that rent is paid each month (through month 10) beginning with the month after the project is completed. How can the profit earned during the next 10 months be
Given the due dates in the previous problem, how would you maximize the number of projects completed on time? (The difference here is that you are ignoring revenues.)
Modify the multiple project-scheduling model in Example 15.4 so that each project has its own due date. These due dates are listed in the file P15_13.xlsx. Assume no revenue is earned unless a project is completed by its due date. Assuming that the objective is still to maximize total revenue, when
In the LAN crashing model in Example 15.3, suppose that activity D is now an immediate successor to activity C, that is, activity D cannot begin until activity C is finished.Everything else stays the same. (However, note that activity B is no longer an immediate predecessor of activity D, and
In the Monitoring Costs sheet of the Project Monitoring.xlsx file, we created two tables of daily costs, one where all activities start at their earliest start times and one where they start at their latest start times.Then we created a single chart for both of these. As an alternative, do the
Suppose, after doing the analysis in Example 15.2, the project manager sees a problem with the current setup.Activity C, selecting the server, requires five systems people, and activity D, selecting the software, requires seven systems people. The problem is that these two activities are scheduled
The “Modeling Issues” section described three alternative types of precedence relationships besides the usual finish-to-start relationship. The following questions ask you to explore the first of these alternatives for the LAN project.a. Start-to-start relationships are sometimes useful for
Expanding on the previous problem, there is a third possible approach for finding the project length and the critical path. We already stated that the critical path is the longest path from the Start node to the Finish node. Using the same approach used in Chapter 5 to find the shortest path
We have illustrated the traditional CPM algorithm for finding the project length and the critical path. An alternative method is sometimes used. It sets up a Solver model for finding a feasible solution to a set of constraints, and there is no objective to maximize or minimize. Let dj be the
How difficult is it to add new activities to an existing project scheduling model? Answer this question by assuming that there are two other activities, labeled P and Q. Activity P moves selected employees to temporary offices while installation occurs, and activity Q moves them back after
The data in Figure 15.5 for the Gantt chart uses the earliest start times for all activities. These could actually be anywhere between the earliest and latest start times without affecting the project completion time. Enter formulas in the start time cells (column B of Figure 15.5) using Excel’s
In the LAN project, activities C and D can be done concurrently.Suppose instead that activity C is an immediate predecessor of activity D. (Perhaps they use the same employees, and these employees can perform only one activity at a time.) How does the AON diagram change?How much does the project
Use a two-way data table to see how sensitive the project completion time in the LAN project is to the duration of activities E and H (selecting cables and wiring offices). Let the durations of these activities vary from 3 to 6 days and from 10 to 16 days, respectively, in increments of one day
Repeat the previous problem, but now keep track of the following outputs in your data table: the project completion time and the slack for each activity. As the duration of activity D changes, do any critical activities become noncritical? Do any noncritical activities become critical?
Use a one-way data table to see how sensitive the project completion time in the LAN project is to the duration of activity D (selecting software). Let the duration vary from 10 to 16 days in increments of one day.
The file P14_63.xlsx contains data on a motel chain’s revenue and advertising.a. Use these data and multiple regression to make predictions of the motel chain’s revenues during the next four quarters. Assume that advertising during each of the next four quarters is $50,000. (Hint: Try using
The Sales2 variable in the file from the previous problem was created from the Sales1 variable by multiplying by monthly seasonal factors. Basically, the summer months are high and the winter months are low.This might represent the sales of a product that has a linear trend and seasonality.a.
The file P14_61.xlsx contains five years of monthly data for a company. The first variable is Time (1–60).The second variable, Sales1, has data on sales of a product. Note that Sales1 increases linearly throughout the period, with only a minor amount of noise. (The third variable, Sales2, will be
Pernavik Dairy produces and sells a wide range of dairy products. Because a government regulatory board sets most of the dairy’s costs and prices, most of the competition between the dairy and its competitors takes place through advertising. The controller of Pernavik has developed the sales and

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Practical Management Science 4th Edition Wayne L. Winston, S. Christian Albright - Solutions

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