Question

15. Work the payoff table and indicate the optimal decision assuming the numbers are costs Z (10%) (10%) (50%) (30%) A 10 20 30 30 B 16 20 20 40 16. Wilbe Manufacturing, Inc., is trying to decide a location for its new manufacturing facility. Wilbo has three choices: Shreveport, Dallas, and Calhoun. The relevant factors for wilba's. consideration are location of raw material (which has a weight of 4), labor rates (weight of 1), and land cost (weight of 5). The rating for each factor is as follow: Shreveport (raw materials: 6, labor rates: 8, land cots: 6) Dallas (raw material: 9, labor rates: 3, land cots: 2) Calhoun (raw material: 5, labor rates: 9, land cots: 8) Construct a factor rating and determine the most desirable location 17. Wilbo, Inc, manufactures digits and thorps. Both items are made from titanium and are produced by a fabricating machine. Digits use 25 ounces of titanium per unit. It takes 12 minutes to fabricate a digit. Thorps use 50 ounces of titanium. It take 15 minutes to fabricate a thorp. Wilbo, can purchase 22,000 ounces of titanium per week and has fabricating time of 40 hours per weck available. The company sells digits for $2500 each and thorps for $5700 each. What is the objective? What are the decision variables? Formulate the objective function Formulate the constraints What constraint would you formulate and incorporate into the problem if you already had a commitment to sell at least 40 digits?

Answer 1

15.

Payoff(A) = 10%*10+10%*20+50%*30+30%*30 = 27
Payoff(B) = 10%*16+10%*20+50%*20+30%*40 = 25.6
Payoff(C) = 10%*30+10%*40+50%*40+30%*40 = 39
Payoff(D) = 10%*30+10%*10+50%*20+30%*60 = 32

Optimal decision is B as this option generates lowest payoff

16.

Factor rating of Shreveport = (6*4+8*1+6*5)/(4+1+5) = 6.2
Factor rating of Dallas = (9*4+3*1+2*5)/(4+1+5) = 4.9
Factor rating of Calhoun = (5*4+9*1+8*5)/(4+1+5) = 6.9

Using factor rating, most desirable location is Calhoun as this has highest score