Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Sony factory producing PlayStation 3 is having problems with its game console printed circuit boards ( PCB ) production machine repair shop. Demand for

The Sony factory producing PlayStation 3 is having problems with its game console printed
circuit boards (PCB) production machine repair shop. Demand for the PS4s produced by the
factory is considerably higher than the factory's capacity, so it is safe to assume that every PS4
they produce is sold, for the retail price of $180.
Because of that, the income that Sony makes out of the factory depends highly on the number
of machines that is available for production. The company has 10 PCB machines, each capable
of producing printed circuit boards for 50 PS4s per day. Each machine needs to go to the repair
shop with an average of every 5 days, following an exponential distribution.
Currently, there are 3 repair stations in the repair shop, each able to repair a machine with an
average of 3 days, following an exponential distribution.
The variable cost related with production is $120 per PS4, and the fixed costs are negligibly
small, except for the costs related with the repair shop. The repair stations are on lease, and
each of them costs $90,000 per month.
Assume that a month is 30 days.
a. Model the problem using an appropriate queueing system. Draw the rate diagram. Clearly
identify your parameters, calculate L, Lq. What is the expected number of PCB machines
available for production? What is the expected profit/loss per month?
b. Suppose the factory can lease additional repair stations with the same monthly payment
($90,000 each). Should they? If yes, how many additional stations should they lease? State
your assumptions and justify your decision.
c. Now suppose that a new type of repair station is available, which performs a functionality
test and fine tunes PCB machines after each repair. Therefore, the repair time for those stations
is longer than the old ones. It is exponentially distributed with a mean of 5 days. Also, they are
more expensive, each costs $108,000? month. However, production machines that are repaired
using the new stations are more reliable, and the mean time they can work without a repair
increases to 10 days (exponential). Should the factory switch to the new repair stations? If yes,
how many should they lease? State your assumptions and justify your decision.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Management

Authors: John A. Pearce II , Richard B. Robinson

12th Edition

007128950X, 978-0071289504

More Books

Students also viewed these General Management questions