TABLE OF CONTENTSProblem 1.........................................................................................................................................1Problem 2.........................................................................................................................................2Problem 4.........................................................................................................................................4A) Linear Programming.........................................................................................................4B) Graphical presentation.......................................................................................................5C) Total Hours........................................................................................................................5Problem 5.........................................................................................................................................6
Problem 1DemandProb.ManufactureProfit Buy Profit DecisionLow0.35-20-7103.5Buy Medium0.3540144515.75Buy High0.3100307021Make(a): From the above calculation, it has been found that Kitchen Aid’s toaster can buy becausethey are getting reliable profit of 3.5 in low or medium demand. While, they can make productsin case of high demand. (b): Minimax regret tableAlternative LowMedium HighMaximum Manufacturing -7143030Buy3.515.752115.75According to the above table, the one which is showing minimum output is taken intoconsideration. Thus, 15.75 is the low as per the minimax regret table so, Kitchen aids can havethe option to buy the component. (c): DemandProb.Manufacture EVPILow0.35-20-7Medium0.354014High0.310030Estimated cost of uncertainty (EMV)37DemandProb.Manufacture Low0.65-20-13Medium0.654026High0.710070Expected payoff cost(EPC)83EPC-EMV46Demand Prob.Buy EVPI Low0.35103.5Medium 0.354515.75High0.3702140.25Demand Prob.Buy Low0.65106.51
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