Management Science Case Solution

Chapter One: Management Science

PROBLEM SUMMARY

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. Total cost, revenue, profit, and break-even Total cost, revenue, profit, and break-even Total cost, revenue, profit, and break-even Break-even volume Graphical analysis (1−2) Graphical analysis (1−4) Break-even sales volume Break-even volume as a percentage of capacity (1−2) Break-even volume as a percentage of capacity (1−3) Break-even volume as a percentage of capacity (1−4) Effect of price change (1−2) Effect of price change (1−4) Effect of variable cost change (1−12) Effect of fixed cost change (1−13) Break-even analysis Effect of fixed cost change (1−7) Effect of variable cost change (1−7) Break-even analysis Break-even analysis Break-even analysis Break-even analysis; volume and price analysis Break-even analysis; profit analysis Break-even analysis Break-even analysis; profit analysis Break-even analysis; price and volume analysis Break-even analysis; profit analysis Break-even analysis; profit analysis Break-even analysis; profit analysis Linear programming Linear programming Linear programming Linear programming 4. 33. 34. 35. 36. Forecasting/statistics Linear programming Waiting lines Shortest route

PROBLEM SOLUTIONS

1. a)

v = 300, cf = $8,000, cv = $65 per table, p = $180; TC = cf + vcv = $8,000 + (300)(65) = $27,500; TR = vp = (300)(180) = $54,000; Z = $54,000 − 27,500 = $26,500 per month

b) v = 2. a)

cf 8,000 = = 69.56 tables per month p − cv 180 − 65

v = 12,000, cf = $60,000, cv = $9, p = $25; TC = cf + vcv = 60,000 + (12,000)(9) = $168,000; TR = vp = (12,000)($25) = $300,000; Z = $300,000 − 168,000 = $132,000 per year

b) v = 3. a)

cf 60,000 = = 3,750 tires per year p − cv 25 − 9

v = 18,000, cf = $21,000, cv = $.45, p = $1.30; TC = cf + vcv = $21,000 + (18,000)(.45) = $29,100; TR = vp = (18,000)(1.30) = $23, 400; Z = $23, 400 − 29,100 = −$5,700 (loss)

b) v =...