UAMS - IBS Moscow Executive MBA Program Management Decision Methods Control Homework#1_1 (стр. 2 )

-  the expected after-tax return on the investment plan

-  the amount by which each of the restrictions was met, including the determination of the overall risk and liquidity factors

-  the expected after-tax return for additional investment above $500,000

-  the most sensitive after-tax return estimates that could affect the optimal solution

-  the effect of a relaxation in the minimum dollar amount to be placed in the money market fund

A cargo airplane has three compartments for storing cargo: front, center, and back. these compartments have capacity limits on both weight and space, as summarized below:

Compartments	Weight capacity (Tons)	Space capacity (Cubic Feet)
Front	12	7000
Center	18	9000
Back	10	5000

The weight of the cargo in the respective compartments must be the same proportion of that compartment’s weight capacity to maintain the balance of the airplane.

The following four cargoes have been offered for shipment on an upcoming flight as space is available:

Cargo	Weight (Tons)	Volume (Cubic Feet/Ton)	Profit ($/Ton)
1	20	50	320
2	16	700	400
3	25	600	360
4	13	400	290

Any portion of these cargo can be accepted. The objective is to determine how much (if any) of each cargo should be accepted and how to distribute each among the compartment to maximize the total profit for the flight.

The R&D department of Little Trykes, Inc. has developed six new prototype tricycle models that can go into production in the coming year. The amount of plastic and the number of big and small wheels for each model, the monthly availabilities, the fixed cost of beginning production, and the unit profits excluding fixed costs are given in the following table.

	Unit Profit	Small Wheels	Big Wheels	Plastic(lb)	Setup Costs
Liltryke	$1.50	3	0	.8	$16,500
Pinktryke	$2.00	1	2	1.2	$18,000
Herotryke	$2.25	2	1	1.5	$17,500
Robinhood	$2.75	2	1	2.1	$18,000
Jeeptryke	$3.00	2	1	1.8	$20.0002
Monster	$3.50	0	3	3.0	$17,000
Available Monthly	10,000	8000	9000

How many units of each product should be produced if Little Trykes wishes to keep the amount of money spent on new setups to a maximum of $70,000.

Assume that the maximum expenditure of $70,000 for new setups is just one part of the company goals. The other three are

-  If the Herotryke is produced, the Robinbood will not be produced.

-  At least four new models are to be produced.

-  If the Jeeptryke is produced, the Monster will also be produced.

What will be the optimal mix in this case?

How does the constraints of maximum setups cost influence the result?

How will result change, if the firm eliminate one of the additional constraints?

Office Warehouse has been downsizing its operations. It is in the process of moving to a much smaller location and reducing the number of different computer products it ing under scrutiny are 10 products Office Warehouse has carried for the past year. For each of these products, Office Warehouse has estimated the floor space required for effective display, the capital required to restock if the product line is retained, and the short-term loss that Office Warehouse will incur if the corresponding product is eliminated (through liquidation sales, etc.).

Product Line	Manufacturer	Cost of Liquidation	Capital to Restock	Floor Space (ft2)
Notebook computer	Toshiba	$10,000	$15,000	50
Notebook computer	Compaq	$ 8,000	$12,000	60
PC	Compaq	$20,000	$25,000	200
PC	Packard Bell	$12,000	$22,000	200
Macintosh computer	Apple	$25,000	$20,000	145
Monitor	Packard Bell	$ 4.000	$12,000	85
Monitor	Sony	$15,000	$13,000	50
Printer	Apple	$ 5,000	$14,000	100
Printer	HP	$18,000	$25,000	150
Printer	Epson	$ 6,000	$10,000	125

Office Warehouse wishes to minimize the loss due to liquidation of product lines subject to the following conditions:

-  At least four of these product lines will be eliminated.

-  The remaining products will occupy no more than 600 square feet of floor space.

-  If one product line from a particular manufacturer is eliminated, all products from that manufacturer will be eliminated. (This affects Compaq, Packard Bell, and Apple.)

-  At least two computer models (notebook, PC, or Macintosh), at least one monitor model, and at least one printer model will continue to be carried by Office Warehouse.

-  At most $75,000 is to be spent on restocking product lines.

-  If the Toshiba notebook computer is retained, the Epson line of printers will also be retained.

Find the optimal policy and comment on how the loosing of any of restrictions will influence the loss.

The Korvex Corporation is a company concerned with developing CD-ROM software applications that it sells to major computer manufacturers to include as "packaged items" when consumers - purchase systems with CD-ROM drives. The company is currently evaluating the feasibility of developing six new applications. Specific information concerning each of these applications is summarized in the following table.

Application	Projected Development Cost	Programmers Required	Projected Present Worth Net Profit
1	$ 400,000	6	$2,000,000
2	$1,100,000	18	$3,600.000
3	$ 940,000	20	$4,000.000
4	$ 760,000	16	$3,000,000
5	$1,260,000	28	$4,400,000
6	$1,800,000	34	$6,200,000

Korvex has a staff of 60 programmers and has allocated $3.5 million for development of new applications.

What is the optimal choice of applications to be developed.

Assume that the following additional conditions hold:

-  It is anticipated that those interested in application 4 will also be interested in application 5, and vice versa. Thus, if either application 4 or application 5 is developed, the other must also be developed.

-  The underlying concepts of application 2 make sense only if application 1 is included in the package. Thus, application 2 will be developed only if application 1 is developed.

-  Applications 3 and 6 have similar themes; thus, if application 3 is developed, application 6 will not be developed, and vice versa.

-  To ensure quality products, Korvex does not wish to expand its product line too rapidly. Accordingly, it wishes to develop at most three of the potential application products at this time.

Incorporate these constraints into the model and determine the optimal choice of applications Korvex should develop. Analyze the influence of these additional constraints.