MG305 FINAL EXAM PART 2 FALL 2020 APPLICATION PROBLEMS COMPLETE 2 PROBLEMS BREAKEVEN PROBLEM 26. An ice cream store sells a pint of ice cream for $4.00 each. The shop incurs a monthly fixed cost of...

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MG305 FINAL EXAM PART 2 FALL 2020 APPLICATION PROBLEMS COMPLETE 2 PROBLEMS BREAKEVEN PROBLEM 26. An ice cream store sells a pint of ice cream for $4.00 each. The shop incurs a monthly fixed cost of $2,000 which includes salaries and rental. The variable cost per pint of ice cream is $1.50. The company is currently selling 600 pints per month. A. How many pints per month does the store need to sell to break-even? B. Using Goal Seek what is the new selling price per pint to achieve a profit of $10,000, if the company continues to sell 600 units C. Using Goal Seek what is the new quantity that the store must sell to achieve a profit of $10,000, if the price remains at $4 LINEAR PROGRAMMING PROBLEM 27. A production manager wants to determine how many units of each product to produce weekly to maximize weekly profits. Production requirements for the products are shown in the following table. Product Material 1 (lbs.) Material 2 (lbs.) Labor (hours) A 3 4 8 B 2 8 4 C 10 none 7 Material 1 costs $14 a pound, material 2 costs $10 a pound, and labor costs $10 per hour. Product A sells for $300 a unit, product B sells for $350 a unit, and product C sells for $350 a unit. Each week there are 600pounds of material 1; 800 pounds of material 2; and 400 hours of labor. Also, there is a weekly demand of 20 units of product . SENSITIVITY REPORT ANALYSIS PROBLEM 28 Using the above sensitivity report, answer the following questions: A. If this is a LP product mix problem report, how many units of each product should be produced? (4 pts) B. If one unit of French is force produced, what will happen to the Objective Function value? (4 pts) C. The Caribbean’s Objective Coefficient is increased to 80. How will the new Objective Function value be determined? (4 pts) D. Which constraints are binding? (4 pts) E. If Finishing is decreased by one unit, how will the Objective Function value be affected? (4 pts) LINEAR PROGRAMMING TRANSPORTATION PROBLEM 29. A company can ship its product from any of its three factories, F1, F2, and F3, to any of its retail outlets, R1, R2, and R3. The supply, demand, and shipping cost information is provided as follows: Demand (units) Supply (units) R1: 300 F1: 275 R2: 500 F2: 350 R3: 200 F3: 400 Shipping Cost/unit ($) R1 R2 R3 F1 1 3 2 F2 3 4 2 F3 2 2 3 Determine the optimal shipping quantities so as to minimize total shipping cots. DECISION ANALYSIS PROBLEM 30. Use this information to answer the following questions. ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000s) based on next year's demand are shown in the table below. Next Year’s Demand Alternative Low High Expand $100 $200 Subcontract $50 $120 Do Nothing $40 $50 Refer to the information above. A. Which alternative should be chosen based on the maximax criterion? B. Which alternative should be chosen based on the maximin criterion? C. Which alternative should be chosen based on the Laplace criterion? D. Which alternative should be chosen based on criterion of realism with alpha = 0.7? E. Which alternative should be chosen based on the minimax regret criterion? Page 1