Assignment # 1
Chapter 5
Total [100 points]
Question # 1 (Problem # 6 in the book): [35 points]
A real estate agent is considering changing her cell phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.45 a minute for daytime calls and $.20 a minute for evening calls. Plan B has a charge of $.55 a minute for daytime calls and $.15 a minute for evening calls. Plan C has a flat rate of $80 with 200 minutes of calls allowed per month and a charge of $.40 per minute beyond that, day or evening.
a. Determine the total charge under each plan for this case: 120 minutes of day calls and 40 minutes of evening calls in a month. [5 points]
b. Prepare a graph that shows total monthly cost for each plan versus daytime call minutes only (i.e. ignore evening minutes for making the graph). [15 points]
c. If the agent will use the service only for daytime calls only(i.e. ignore evening minutes), over what range of call minutes will each plan be optimal? [15 points]
Question # 2: [35 points]
Food Goblin Supermarkets use both cashiers and baggers to serve customers at check out. During the first 6 hours of each workday (Monday–Friday), 4 cashiers and 2 baggers serve approximately 20 customers per hour. A cashier and a bagger who require approximately 5 minutes at checkout and 5 minutes at bagging serve each customer.
a. Calculate the utilization of both cashiers and baggers. [15 points]
b. Assume that both baggers and cashiers are cross-trained to perform both activities so that they can serve customers independently. Customers are now both checked and their groceries bagged by one individual. Further, assume that it takes 12 minutes for one individual to both cash out and bag each customer’s groceries. Calculate the utilization of this new group of 6 cross-trained employees. [15 points]
c. Which option would you recommend and why? [5 points]
Question # 3 (Problem # 10 in the book): [30 points] A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:
Product forecasts and processing times on the machines are as follows:
a. Assume that only purchasing costs are being considered. Which machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. [20 points] b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $10 each, B machines have an hourly operating cost of $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements? [10 points]