For all the prablems, to receive full scere, yeu mest show your cemplete and accurate work. i.e. show bow you calculated the numbers you ase. If yeu anly previde the final answers withouf comptatations, you will net receive a full scere (and will miss the opportunity of partial credits). The points from the bonus question in this homewerk will cotast towards your Homework 2 score. Iroblem 1. (12 points) Astro Industries of Minncapolis, MN, makes weekly shipments to 12 customers in the Dalias area. Each customer's order weighs, on average, 1,250 pounds A direct truck shipment from Minneipolis to Dallas costs $1,500. The thakimum lond per truck is 25,000 pounds. a) How much would it cost Astro to make dinect, single-otder shipments to all of its eustormers cach weck? What would the utilization level for the trucks look like? ( 2 potnts) b) Suppose a Dallas-bwsed warchousing firm has agreed to run a break-bulk (cross-docking) warehousing operation for Astro at a cost of 580 per hundred-weight. I.ocal delfveries to euch eustomer would tack on amother $150 per customer per week. How much money could Astro save by going with the break-bulk solution? What would the utilization level for truck be in this ease? (8 posints) c) How high wotald the warehousing cost (currently at 580 per hundred-wetght) must be before break-bulk wanehousing is no more attractive than direct shipments? ( 2 points) Nore: You can solve Parts a and b together as we did in class practice probiem. Problem 2. (12 points) A produce distributor uses 2,560 packing crates a month, and each crate is purchased at a cost of \$16. The manager has assigned an annual carrying cost of 25 pereent of the purchase price per crate. The cost of placing an order is $240. Curtently the manager orders once a month. a) What is the Economic Order Quantity (EOQ) for this product? (4 pts) b) How much could the firm save annually in total holding and ordering costs by ordering at the EOQ level? ( 8 pts) (Show the computations for the total holding and ordering costs in detail) Problem 3. (12 points) A manager has just received a revised price schedule for its main product from a vendor as seen in the table below. What order quantity should the manager use to minimize total costs? Annual demand is 12,000 units, ordering cost is $180, and annual carrying cost is $3 per unit (regardless of the price per unit). Problem 4. (12 points) Milk is stocked at a grocery store each week. At the end of each week, unsold milk price is roduced by 25% and the store can sell the unsold milk fully at this lower price. If weekly demand for milk: is normally distributed with a mean of 200 gallons and standard deviation of 20 gallons, find the price for which a fresh gallon of milk sells. Assume that the store has a service level of 90% and purchases milk for $3,1 per gallon. Problem 5. (12 points) a) Compute the multifactor productivity measure (output in sales dollars) for each week using the data provided below to produce chocolate bars. Assume 40 -hour weeks and an bourly. wage of \$18. Overhead is 1.25 times the total weekly labor cost. Material cost is $48 per pound. Standard price to sell is $150 per unit. ( 10 points) b) What do the productivity figures suggest? (What is the trend?) (2 point) Bonus Problem. ( 6 points - bonus points will be added to your homework score) a) A barbecue sauce producer sells their product in a 45 ounces bottle. Their historical process mean has been 45 ounces with a standard deviation of 1.50 ounces. If their tolerance limits are set at 45 ounces plus or minus 5 ounces, what is the process capability ratio of the bottle filling process? (3 points) b) A barbecue sauce producer sells their product in a 50 ounces bottle. Their current process mean is 50.5 ounces with a standard deviation of 1.25 ounces. If their tolerance limits are set at 50 ounces plus or minus 4 ounces, what is the process capability index of the bottle filling process? ( 3 points)
