3 production and operation questions

CHAPTER 4: Reliability

Question 1: (1 point)

Tom has three TV sets (with reliabilities of .80, .80, and .85) at home. Only one of them needs to function for him to watch the Super bowl. Tom’s house is located in an area that has frequent power outages. Tom has a generator to run its TV set in case of a power failure. The local power company has a reliability of .90, and the generator has a reliability of .95.

a. What is the probability that he will have a functioning TV set? (0.4 point)

b. What is the probability that he will have power to run his TV? (0.3 point)

c. What is the probability that he will have both power and a functioning TV to watch the Super bowl? (0.3 point)

CHAPTER 5: Capacity

Question 2: (0.4 point)

For a machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is anticipated to be 35 cords per day.

a. What would be its utilization? (0.2 point)

b. What would be its efficiency? (0.2 point)

Question 3: (0.6 point)

An investment proposal will have annual fixed costs of $60,000, variable costs of $35 per unit of output, and revenue of $55 per unit of output. a. Determine the break-even quantity. (0.3 point)

b. What volume of output will be necessary for an annual profit of $60,000? (0.3 point)

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