Please read the attached document for instructions. MGMT5360 – Decision Making Techniques for Managers Winter, 2006

MGMT5260 – Decision Making Techniques for Managers

Rules and Instructions.

1. Exam time: Thursday, February 8, 6:00 pm – 10:00 pm CT

2. This is “Open Book – Close Everything Else” exam.

3. There are four problems in the exam and you need to create a single Excel file with four worksheets (tabs) – one tab per problem.

4. Name your test file as YourLastName, FirstName_MidTerm (e.g., Smith,John_MidTerm).

5. You are advised to save frequently.

6. When you are done

a. Save your file and close Excel.

b. Submit your solution through Blackboard.

7. Your submission should be completed before 10:00 pm CT.

Special comment for Problem 4.  This is a nonlinear model and you are recommended to use the “Multistart” option in Solver to get the best solution. When you create your model and invoke the Solver, click on “Options” button, select “GRG nonlinear” tab, then check the “Use Multistart” checkbox, then OK. Problem 1 (25 points)

Problem 2 (25 points)

Problem 3 (25 points)

Problem 4 (25 points) . Use Multistart option in Solver.

 Problem number Items for grading Maximum points #1 Formula for Copies made 8 Formula for Total Cost 5 Formula for Total Revenue 3 Break -even 3 Using DataTable 3 Graph 3 #2 Formulas for Contancts made 8 Formulas for total number of calls made 3 Formulas for total cost 3 Constratint for <=40% evening calls 5 Constrain for nuber of calles answered by various groups 3 Changing cells, min, non-negative, linear model 3 #3 Formulas for Total Used and Produced 2 Formula for Cans Used 2 Formulas for Actual 6 Formulas for Required 6 Formula for Profit 3 Constraints 3 Changing cells, max, non-negative, linear model 3 #4 Values for a and b for Plant 2 3 Formula for Total 4 Formula for Cost 8 Formula for Revenue 5 Solver: changing cells, constraints, GRG nonlinear, MultiStart 5 Total 100

Created by: Dr. Levon Hayrapetyan Page 1 of 6

Profit per canMeow ChowBow Chow

Blending Plan

Meow ChowBow ChowUsedAvailable

Horse meat

Ground fish

Total produced

Cans available

Cans used

Fish constraintHorse meat constraint

ActualActual

RequiredRequired

Profit

Problem 3. Bark’s Pet Company produces canned cat food called Meow Chow and

canned dog food called Bow Chow. The company produces the pet food by blending

horse meat, ground fish, and a cereal additive. Each week the company has 600

pounds of horse meat, 800 pounds of ground fish, and 1,000 pounds of cereal

additive available to produce both kinds of pet food. Meow Chow must be at least

half fish, and Bow Chow must be at least half horse meat. The company has 2,350

one pound cans available each week. A can of Meow Chow earns \$1.10 in profit,

and a can of Bow Chow earns \$1.40 in profit.

The company wants to create a model that will help to maximize its weekly profit.

Costs of producing x units at each plant are of form ax

b

, where

Plant 1Plant 2

a125

b1/2

Unit selling prices

Plant 1Plant 2

Number produced

Plant 1Plant 2TotalMax sales

<=

<=<=

Capacity

Cost

Revenue

Profit

Problem 4.

Widgetco produces widgets at plants 1 and 2. It costs

125x

1/2

dollars to produce x units at plant 1 and 235x

1/3

dollars to

produce x units at plant 2. Each plant can produce up to 500 units.

Each unit produced can be sold for \$10. At most 800 widgets can

be sold.

Determine how Widgetco can maximize its profit.

Inputs

Yearly rental cost

Other monthly fixed costs

Cost per copy

Charge per copy

Days per year

Copies per copier per year

Daily demand (trial value)

Total (i.e., annual) demand

Total cost

Total revenue

Total profit

Daily demandProfit

50

75

100

125

150

175

200

225

250

275

Problem 1. You are thinking of opening a small copy shop and rent a copier. It costs

you \$1,000 to rent a copier for a year and it costs you \$0.03 per copy to operate a

copier. Other fixed costs of running the store amount to \$150 per month. You are

planning to charge \$0.10 per copy. You are open 365 days per year. A copier can

make up to 80,000 copies per year.

(a) Given these assumptions, what level of daily demand will enable you to break even?

(b) Calculate the annual profits for specified (in this template) daily demands and graph

them.

PercentagesDaytimeEvening

Wife30%30%

Husband10%30%

Single male10%15%

Single female10%20%

Cost/call

Max % of evening calls40%

DaytimeEveningTotal

<=

Wife

Husband

Single male

Single female

Total cost

Problem 2. For a telephone survey, your department needs to contact at least 600

wives, 480 husbands, 400 single adult males, and 440 single adult females. It costs \$3.20

to make a daytime call and \$6.00 to make an evening call. The table below lists the

results that can be expected. For example, 30% of all daytime calls are answered by

wives, and 15% of all evening calls are answered by single males. Because of a limited

staff, at most 40% of all phone calls can be evening calls.

Create a model to determine how to minimize the cost of completing the survey.

Max evening calls:

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