Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 13, Problem 44AP
Summary Introduction
Interpretation:
Effectiveness of strategy.
Concept Introduction:
The objective of optimal policy is to determine the value of 't’ that minimizes the total cost of maintenance and replacement over an infinite horizon.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A cosmetics company fills its best selling jars of facial cream by an automatic dispensing machine. The machine is set to dispense a mean of 7.2 ounces per jar. Uncontrollable factors in the process can cause either underfill or overfill, both of which are undesireable. In such a case, the dispensing can be stopped and recalibrated. Regardless of the mean amount despensed, the standard deviation of the amount dispwnsed always has a value of 0.25 ounce. A quality control engineer routinely selects 36 jars from the assembly line to check the amounts filled. On one occasion, the sample mean is 7.8 ounces. Determine if there is sufficient evidence in the sample to indicate, at the 1% level of significance, that the machine should be recalibrated.
A series of thefts from your pharmacy area have occurred in the last six weeks. The director of security and the head of pharmacy services now require all persons working in the pharmacy department with access to drugs to clock out after their shifts and then go through a security check before leaving the building. Several employees have complained that they should be paid for this time because the security check is for the employer’s benefit. The director of security and the head of pharmacy services have responded that this security check is for the benefit of the employees to ensure that no one is unjustly accused.
Is either party correct?
If so, which one and why?
The Woodruff Corporation purchased a piece
of equipment three years ago for $211,000. It
has an asset depreciation range (ADR)
midpoint of eight years. The old equipment
can be sold for $89,000. A new piece of
equipment can be purchased for $321,500. It
also has an ADR of eight years. Assume the
old and new equipment would provide the
following operating gains (or losses) over the
next six years.
Old equ
26,250
14,750
9,500
6,000
5,500
-6,500
The firm has a 25 percent tax rate and a 9
New equipment
81,000
74,500
70,750
61,250
51,500
46,750
year
1
4
percent cost of capital.
What is the net cost of the new equipment?
Round your solution to two decimal places.
What is the present value of incremental
benefits? Round your solution to two decimal
places.
What is the NPV of this replacement decision?
Round your solution to two decimal places.
Chapter 13 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 13.1 - Prob. 3PCh. 13.1 - Prob. 4PCh. 13.1 - Prob. 5PCh. 13.1 - Prob. 6PCh. 13.2 - Prob. 7PCh. 13.2 - Prob. 9PCh. 13.3 - Prob. 13PCh. 13.3 - Prob. 14PCh. 13.4 - Prob. 15PCh. 13.4 - Prob. 16P
Ch. 13.4 - Prob. 17PCh. 13.4 - Prob. 18PCh. 13.4 - Prob. 19PCh. 13.4 - Prob. 20PCh. 13.6 - Prob. 21PCh. 13.6 - Prob. 22PCh. 13.6 - Prob. 23PCh. 13.6 - Prob. 24PCh. 13.6 - Prob. 25PCh. 13.7 - Prob. 26PCh. 13.7 - Prob. 27PCh. 13.7 - Prob. 28PCh. 13.7 - Prob. 30PCh. 13.7 - Prob. 31PCh. 13.7 - Prob. 32PCh. 13.7 - Prob. 33PCh. 13.7 - Prob. 34PCh. 13.8 - Prob. 35PCh. 13.8 - Prob. 36PCh. 13.8 - Prob. 37PCh. 13.8 - Prob. 38PCh. 13.8 - Prob. 39PCh. 13.8 - Prob. 40PCh. 13.8 - Prob. 41PCh. 13 - Prob. 42APCh. 13 - Prob. 43APCh. 13 - Prob. 44APCh. 13 - Prob. 45APCh. 13 - Prob. 46APCh. 13 - Prob. 48APCh. 13 - Prob. 49APCh. 13 - Prob. 51APCh. 13 - Prob. 52APCh. 13 - Prob. 53AP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- The annual maintenance costs of a machine that has been in use for 3 years are 300 TL, 350 TL and 375 TL, respectively. The machine is expected to be available for 8 years after purchase. The maintenance costs foreseen for the coming years are 400 TL in the first year and 150 TL in the following years. If the machine is sold today, it can be sold for 1500 TL, and in the following years for 1000 TL. What is the optimum regeneration time of the machine if the MCVO is 10%?arrow_forwardA manager is simulating the number of times a machine operator stops a machine to make adjustments. After careful study the manager found that the number of stops ranged from one to five per cycle and that each number of stops was equally likely. Using the random numbers 0.90 and 0.36 (in that order), determine how many stops for adjustments each of the next two cycles will have. The first cycle will have stops and the second cycle will have stops.arrow_forwardA manufacturer of microwaves has discovered that male shoppers, on average have lower values for microwave ovens than female shoppers. Additionally, male shoppers attribute almost no extra value to an auto-defrost feature, while female shoppers, on average, value the auto-defrost feature. The manufacturer has determined that men value a simple microwave at $70 and one with autodefrost at $80, while women value a simple microwave at $80 and one with auto-defrost at $150. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue?arrow_forward
- An airline company has been contracting a maintenance company to do overhauls for its planes at a cost of $51275 per plane per quarter. The airline company estimates that by building a $1461838 maintenance facility with a life of 5 years and a residual market value of $770217 at the end of its life, they could handle their own overhaul at a cost of only $42020 per plane per quarter. What is the minimum number of planes they must operate to make it just profitable to build this facility? (=2% per quarter). • 25 O 31 Clear my choicearrow_forwardA hospital has three independent fire alarm systems, with reliabilities of .95, .97, and .99. In the event of a fire, what is the probability that a warning would be given?arrow_forwardWhich of the following scenarios is likely to result in an unused (potentially sustainable) competitive advantage? Group of answer choices A firm has a rare and inimitable resource that is not valuable A firm has a valuable, rare resource that is not inimitable All of the options A firm has a valuable, rare, inimitable resource that it is not organized to exploitarrow_forward
- The warehouse management system (WMS) of RoyaTech's Delaware Valley warehouse tracks service level at the warehouse. A service level failure at the warehouse is an event where a customer's order could not be shipped out in full by the promised shipping time. RoyalTech's ordering system prevents customers from placing orders on products that are not in-stock at the warehouse. Therefore, we can make the statement that "the WMS is guaranteed to show 100% service level at the warehouse." Choose the most appropriate statement in response: O True, because orders will be placed only for products that are available. O False, because service level can never be 100%. O False, because resource constraint or human error may delay the shipping even though inventory is available in the system. O False, because WMS calculations are faulty.arrow_forwardPlease show step by step how to solve this. Assume, X = Z Y = A Z = Harrow_forwardNyka cosmetics is planning to launch cosmetics in teen group caterigary. However,this market is crowded with a lot of competitors already Before the launch , nykaa cosmetics is trying to estimate the potential of thier cosmetics in the market by understanding the following for the next 2 years .The proportion of current cosmetics users( in teen category)who are going to switch to nykaa cosmetics. The source of business of nykaa cosmetics is the percentage of people who would use nykaa cosmetics in 2021 who once used each of the competitors for example 40% of the nykaa cosmetic users in 2021 used to use competitor 1 in 2019 In the next years ,30% of cosmetic users in teen category will switch to nykaa cosmetics .what will be the market share graph for 2021 including the 5 competitorsarrow_forward
- BestLine Hardware In spring of last year, BestLine Hardware undertook an ambitious program to overhaul their supply chain. In early planning, BestLine predicted that they could save over 25% of their entire supply chain costs by streamlining and optimizing their practices. One of the areas that had the most promise for savings and efficiency was that of order communication and fulfillment. In the existing system, Bestline’s inventory management department triggered a request to the ordering department. The ordering department then created an order and faxed it out to one of their suppliers. The supplier marked down on the fax what could be fulfilled against the order and would fax it back to BestLine for processing. Over time, this fax-based system proved to be inefficient and error-prone. Faxes were often lost or garbled, and hand-written comments could be very difficult to interpret accurately. As a part of their supply-chain efficiency effort, BestLine decided that they would try to…arrow_forwardIn an article in the April 2012 issue of the Newton Conservators newsletter you can read that In the early 1970s there were approximately 40,000 trees lining the streets of Newton. Today, that number is about 26,000 - a 35% loss. The current annual rate of decline is about 650 trees per year. At this rate, if unchecked, public street trees would diminish to approximately 10,000 within a generation (25 years), and in 40 years, public street trees would no longer be part of the Newton landscape. d. Write the equation for the linear model implicit in this quotation (use years since 2012 as the independent variable). Identify the slope and the intercept, with their units.arrow_forwardJankord Jewelers permits the return of their diamond wedding rings, provided the return occurs within two weeks. Typically, 20 percent are returned. If nine rings are sold today, what is the probability that fewer than four will be returned? A- 0.914 B- 0.962 C- 0.923 D- 0.935arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,