The Conner Company uses a two-step process for making wooden boards with holes in them.  Step 1 is drilling and Step 2 is sanding. Drilling is done using an electronic drill that takes 8 minutes to set up and ½ minute to drill each hole. Step 2 involves a sanding machine with a 20 minute setup time that processes each board (regardless of how many holes are in it) in 10 minutes. If all orders are for a single batch of 10 boards, and each board has 14 holes what is the capacity of this 2-step process? (Assume that both machines only need to be set up once.)

The Harbor-East Star, a daily local newspaper, used the newsvendor model to determine their production quantity to be 1500 papers. Following the recession, the editor observed that the average demand stayed the same but the variability (standard deviation) of demand increased. How should the production quantity be changed if demand is normally distributed?

Tik Ed McMaster is selling tickets to a balloon ride. The ride takes place at dawn on Sunday because the winds are most calm at that time of day. Demand for the ride is equally likely to be 1, 2, 3, 4, or 5 units. Tik buys the tickets for $10 each and resells them for $20 each. Unsold tickets have no value, and he can only place one order for this week. If Tik has to place his order before knowing demand, how many should he order?

The Dum-Dum Supply store is having a one-time offering of newspapers. Demand (x) is uniformly distributed with a mean of 10 units. The Marginal Benefit (MB) of a sale is equal to the cost of over-ordering. Which value shown below is closest to the number of units the store should order from its supplier?

If the cost of under-ordering exceeds the cost of over-ordering, and the demand distribution is symmetric then when the level of uncertainty in demand increases (higher standard deviation or variance), what happens to the optimal order size in the newsvendor model?

When considering the EOQ framework, the fixed holding cost is:

The Hopkins bookstore has decided to stock Lacrosse-playing Blue Jays as part of its souvenir offerings. This particular sub-species of Blue Jays does not get along well with other birds so the storage cost is 10% of the purchase price times the square of the average number of birds in the store. Demand for these birds is stable at 10 units per week, the store is open for 50 weeks per year, the ordering cost S = $10, and all lead times are negligible. [Hint: assume p = $10, and that the total of the annual holding cost, ordering cost, and purchase cost is  .] Since the retailer cannot order partial birds, he decides to round the EOQ down to the nearest integer. How many birds should he order?

Consider a production system for a single product that must be produced on a make-to-order basis and we don’t have the power to adjust the price. What methods can we use to accommodate variability in the arrival rate for customer orders?

In a system with four distinct production steps, the manager decided to double the capacity of the system by adding another machine at one of the steps. As a result the capacity of the system increased but it did not double. Which of the following statements present the most reasonable explanation(s)?

A company uses the EOQ model to find order quantities and has its setup cost double while all other aspects stay the same, what happens to the average inventory level?