A Japanese steel manufacturer is considering expanding operations. From experience, it estimates that new capacity additions obey
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A Japanese steel manufacturer is considering expanding operations. From experience, it estimates that new capacity additions obey the law f (y) .00345y.51, where the cost f ( y) is measured in millions of dollars and y is measured in tons of steel produced. If the demand for steel is assumed to grow at the constant rate of 8,000 tons per year and future costs are discounted using a 10 percent discount rate, what is the optimal number of years between new plant openings?
The following problems are designed to be solved by spreadsheet.
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Related Book For
Production And Operations Analysis
ISBN: 9781478623069
7th Edition
Authors: Steven Nahmias, Tava Lennon Olsen
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