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Solutions To Sample Problems From Chapter 5

 5.3 a) X = 32 s = 9.55 b) Interval #Obs. Frequency <20 4 .111 20-27 8 .222 28-33 9 .250 34-37 4 .111 38-43 6 .167 >43 5 .139 Total 36 1.000 Let X = number of gallons used in one week. Then 0.869 P{X ≤ 19} = P(Z<(19 – 32)/9.55) = P(Z < -1.36) =

Other probabilities are computed in a similar fashion giving:

Interval

Probability

Observed Frequency

 X = 19 .0869 .1111 19 < X = 27 .2146 .2222 27 < X = 33 .2383 .2500 33 < X = 37 .1587 .1111 37 < X = 43 43 < X .1764 .1670 .1251 .1380 Total 1.0000 1.0000

Clearly there is a very close agreement between the probabilities and the observed frequencies. (A formal χ 2 goodness of fit test gives χ 2 = .859 from which one concludes that the normal provides a very good fit.

c) Let Y = X 1 + X 2 +

+ X 6

Then E(Y) = (6)(32) = 192

σ Y

=

(6)(9.457) 2 = 23.385

P{Y 200} = P

Z 200 192

= P{Z .342} = .6331

23.385

5.7

If he only keeps track of the number of sales, he has no way to accurately estimate the demand since demand = sales + lost sales. He would need some way to gauge the lost sales. One method would be to increase his supply for a period of time so that he would be able to meet all demand.

5.8 a) c 0 c

u

= .08 - .03 = .05 = .35 - .08 = .27

Critical ratio =

.27

.05 + .27

= .84375

From the given distribution, we have:

 Q f(Q) F(Q) 0 .05 .05 5 .10 .15 10 .10 .25 15 .20 .45 20 .25 .70 < - - - - .84375 25 .15 .85 30 .10 .95 35 .05 1.00

Since the critical ratio falls between 20 and 25 the optimal is Q = 25 bagels.

b) The answers should be close since the given distribution appears to be close to the normal.

c) µ

= xf(x) = (0)(.05) + (5)(.10) +

+(35)(.05) = 18

σ 2 = x 2 f(x) - µ 2 = 402.5 - (18) 2 = 78.5

σ =

(2)(32)(1032)
.36

=

8.86

The z value corresponding to a critical ratio of .84375 is 1.01. Hence,

Q* =

σz

+

µ = (8.86)(1.01) + 18 = 26.95 ~ 27.

5.11

a) X

s 2

= 34.0 = 204.4 (s = 14.3)

b) c u = 60 - 40 = 20 c 0 = 40 - 29 = 11

Critical ratio =

20

20 + 11

= .6452

c)

z = .37,

Q* =

σz

+ µ = (14.3)(.37)

+ 34 = 39.3

39

 #Times Relative Cum Value Observed Freq. Freq. 10 1 .1 .1 20 1 .1 .2 30 4 .4 .6 < - - - critical ratio = .6452 40 2 .2 .8 50 1 .1 .9 60 1 .1 1.0

Q * 33 by linear interpolation.

d) The normal approximation is not very accurate since the order quantity it recommends is almost 20% too large.

5.13

 a) h = (1.50)(.28) = .42 K = 100 p = 12.80

λ = (280)(12) = 3360

µ = (280)(5) = 1400

σ = 77 5 = 172.18
2Kλ
(2)(100)(3360)
EOQ = Q 0 =
+
= 1265
h .42
1 - F(R 1 )
=
Qh
(1265)(.42)
= .0124
pλ =
(12.80)(3360)
z 1 = 2.24,
L(z 1 ) = .0044,
n(R 1 ) = .75
Q
=
[K + pn(R)] =
1
h
(2)(3360)
.42

[100 + 12.80(.75)] = 1324

1 - F(R 2 ) = Qh

pλ = (1324)(.42)

12.80(3360)

=

.0129

z 2 = 2.23

L(z 2 ) = .004486

n(R 2 ) = .77

Q 2

=

[ 100 + 12.80(.77)] = 1326

Close enough to stop.

z = 2.23, R = σz + µ = (172.18)(2.23) + 1400

=1784

Optimal (Q,R) = (1326,1784)

b)

G(Q,R)

=

Kλ

Q

+ h

Q

2

+ pλn(R)

+ R µ

Q

Kλ

= (100)(3360)

Q

1326

h

Q

2

+ R µ

= \$253.39

= \$439.74

pλn(R)

Q

= (12.80)(3360)(.77)

1326

= \$24.97

c) σ = 0 EOQ solution

cost =

2Kλh =
(2)(100)(3360)(.42)

= \$531.26

G(Q,R) = \$718.10

cost of uncertainty = \$718.10 - 531.26 = \$186.84 yearly.

5.16 Type 1 service of 95%

Q = EOQ = 1265

F(R) = .95,

R µ

= 1.645, which gives R = 1683.

σ

5.23

a)

From the solution of problem 14 (Q,R) = (81,124) Set s = R = 124

S =

b) x

1

R

+

Q

= 205

= 26 < 124 order to 205 in January.

(order quantity

=

205

-

26

=

179)

x

x

x

x

x

2

3

4

5

6

(x 7

 = 205 - 37 = 168. do not order in February. = 168 - 33 = 135. do not order in March. = 135 - 26 = 109 < 124. order to 205 in April. (order quantity = 205 - 109 = 96) = 205 - 31 = 174. do not order in May. = 174 - 14 = 160. do not order in June. = 160 - 40 = 120 ⇒ order 85 units in July.)
 5.25 a) Cum Fraction Annual Annual of Item Volume Profit Profit Profit Total Costume Jewelry 1900 \$15.00 28500.00 28500.00 0.41 Novelty Gifts 2050 \$12.25 25112.50 53612.50 0.76 A Earrings 1285 \$3.50 4497.50 58110.00 0.83 Children's Clothes 575 \$6.85 3938.75 62048.75 0.88 Men's Jewelry 875 \$4.50 3937.50 65986.25 0.94 B Tee Shirts 1550 \$1.25 1937.50 67923.75 0.97 Greeting Cards 3870 \$0.40 1548.00 69471.75 0.99 Chocolate Cookies 7000 \$0.10 700.00 70171.75 1.00 C

b) The cookies attract customers to the store. (In retail parlance, it would be known