Problem 1. A still company estimates the demand for steel as follows (in millions of tons per year): a. (0.3 points) If capacity is set at 18 million tons, how much of a capacity cushion is there? b. (0.2 points) What is the probability of idle capacity if capacity is set at 16 million tons? c. (0.5 points) If it costs $8 million per million tons of lost business and $80 million to build a million tons of capacity, which capacity level, among 10, 12, 14, 16, and 18 , will minimize the total costs? Problem 2. Given the following demand forecasts, costs, and constraints for a company. Regular production capacity =7,000 units/quarter Overtime capacity =2,000 units/quarter Subcontracting capacity =7,000 c. What is the total cost if the company uses a Chase Demand Strategy with Subcontracting? (no need to consider hiring and/or firing) Fill in the table below. Problem 3. At the University Hospital, five blood samples must be scheduled through a blood-testing laboratory. Each sample goes through up to four different testing stations. The times for each test and the due dates for each sample are as follows: a. Using a Gantt chart, schedule these five samples in priority order of earliest due date first. What is the makespan? b. Assume that the capacity of each test station (A, B, C, and D) is doubled. Prepare an FCS for this situation. Beginning inventory =0 Regular production cost =$10 /unit Overtime production cost =$14 /unit Subcontract production cost =$18 /unit Inventory holding cost =$4 /unit/quarter Backorder cost =$5/ unit/quarter Assume backorders carry over to the next quarter, that is, you need to use this quarter's inventory to fulfill previous quarter's backorder. a. What is the total cost if the company uses a Level Production Strategy with Overtime and Subcontracting? Fill in the table below. b. What is the total cost if the company uses a Level Production Strategy with Backorders? Fill in the table below. Backorder can accumulate and carry over to next period. a. Using a Gantt chart, schedule these five samples in priority order of earliest due date first. What is the makespan? b. Assume that the capacity of each test station (A, B, C, and D) is doubled. Prepare an FCS for this situation. Problem 4. A secretary is considering three dispatching rules for typing term papers. The following information is given on jobs that are waiting to be typed: "Includes typing, corrections, and copyng. Use the following dispatching rules to determine the sequence for term paper processing. a. SPT b. FCFS c. CR Beginning inventory =0 Regular production cost =$10 /unit Overtime production cost =$14 /unit Subcontract production cost =$18 /unit Inventory holding cost =$4 /unit/quarter Backorder cost =$5 /unit/quarter Assume backorders carry over to the next quarter, that is, you need to use this quarter's inventory to fulfill previous quarter's backorder. a. What is the total cost if the company uses a Level Production Strategy with Overtime and Subcontracting? Fill in the table below. b. What is the total cost if the company uses a Level Production Strategy with Backorders? Fill in the table below. Backorder can accumulate and carry over to next period