Free Essay

Eurowatch

In:

Submitted By vh00420
Words 267
Pages 2
Making watches.

There are 2 assembly lines #1 and #2.

Defect free rate

#1. 98%

#2. 99%

Production rate 500 per hour for each line.

1. For each line I am at least 99% sure that I will produce no more than __________ defective watches in an hour.

2. An order will be produced on line #2. We want to be at least 99% sure that we get a minimum of 500 defect free watches. How large should the minimum production run be? (ie 501? 502?)

3. (4 in text). We have an order for 100 watches.

Price per watch is $500. If can charge for only 100 watches.

Cost per unit to produce is $450

Order to be filled by one line only.

Watches are not tested before shipping. If we deliver less than 100 defect free units Each unit short of 100,

Refund the $500 price

An expedited production at $1,000 per watch will be done to make up the shortage at no charge to the customer.

Maximum we will ship in the order is 110 watches. Do not consider batch size above 110.

What is the optimal amount to produce (maximize expected profit) and ship if using line #1, line #2?

Example is we made 102 watches and there were three defects in the batch

Rev Prod Costs # to exp Refund exp costs profit

50,000 45,900 1 500 1,000 2,600

Assume all expedited watches will be defect free.

DO NOT DO part 3 IN TEXT

Remember to do a brief write up including the answers to above questions.

Similar Documents

Premium Essay

Euro Watch Company

...others, is free of defects with probability 0.98. The similar probability for line 2 is 0.99. Each line produces 500 watches per hour. The production manager has asked you to answer the following questions. 1. She wants to know how many defect-free watches each line is likely to produce in a given hour. Specifically, find the smallest integer k (for each line separately) such that you can be 99% sure that the line will not produce more than k defective watches in a given hour. (Hint: Use CRITBINOM(*,*,*) function in Excel.) 2. EuroWatch currently has an order for 500 watches from an important customer. The company plans to fill this order by packing slightly more than 500 watches, all from line 2, and sending this package off to the customer. Obviously, Euro Watch wants to send as few watches as possible, but it wants to be 99% sure that when the customer opens the package, there are at least 500 defect-free watches. How many watches should be packed? 3. EuroWatch has another order for 1000 watches. Now it plans to fill this order by packing slightly more than one hour's production from each line. This package will contain the same number of watches from each line. As in the previous question, Euro Watch wants to send as few watches as possible, but it again wants to be 99% sure that when the customer opens the package, there are at least 1000 defect-free watches. The question of how many watches to pack is unfortunately quite difficult because the total number of defect-free...

Words: 711 - Pages: 3

Premium Essay

Ddeqdqer

...others, is free of defects with probability 0.98. The similar probability for line 2 is 0.99. Each line produces 500 watches per hour. The production manager has asked you to answer the following questions. 1. She wants to know how many defect-free watches each line is likely to produce in a given hour. Specifically, find the smallest integer k (for each line separately) such that you can be 99% sure that the line will not produce more than k defective watches in a given hour. (Hint: Use CRITBINOM(*,*,*) function in Excel.) 2. EuroWatch currently has an order for 500 watches from an important customer. The company plans to fill this order by packing slightly more than 500 watches, all from line 2, and sending this package off to the customer. Obviously, Euro Watch wants to send as few watches as possible, but it wants to be 99% sure that when the customer opens the package, there are at least 500 defect-free watches. How many watches should be packed? 3. EuroWatch has another order for 1000 watches. Now it plans to fill this order by packing slightly more than one hour's production from each line. This package will contain the same number of watches from each line. As in the previous question, Euro Watch wants to send as few watches as possible, but it again wants to be 99% sure that when the customer opens the package, there are at least 1000 defect-free watches. The question of how many watches to pack is unfortunately quite difficult because the total number of defect-free...

Words: 709 - Pages: 3

Premium Essay

Maritime Terrorism in Southeast Asia

...CREATE Research Archive Non-published Research Reports 2007 A Brief Analysis of Threats and Vulnerabilities in the Maritime Domain Niyazi Onur Bakir CREATE, nbakir@usc.edu Follow this and additional works at: http://research.create.usc.edu/nonpublished_reports Recommended Citation Bakir, Niyazi Onur, "A Brief Analysis of Threats and Vulnerabilities in the Maritime Domain" (2007). Non-published Research Reports. Paper 5. http://research.create.usc.edu/nonpublished_reports/5 This Article is brought to you for free and open access by CREATE Research Archive. It has been accepted for inclusion in Non-published Research Reports by an authorized administrator of CREATE Research Archive. For more information, please contact gribben@usc.edu. A BRIEF ANALYSIS OF THREATS AND VULNERABILITIES IN THE MARITIME DOMAIN1 N.O. BAKIR University of Southern California, Center for Risk and Economic Analysis of Terrorism Events (CREATE) 3710 McClintock Avenue, RTH 322, Los Angeles, CA 90089-2902 USA Abstract The attacks of September 11 have exposed the vulnerability of the American homeland against terrorism. Terrorists have already expressed their intentions to continue their aggression towards United States. Their goal is to incur maximum economic damage, inflict mass casualty, spread unprecedented fear among citizens and thus destabilize the nation to further their agenda. Many critical sites lay across US maritime borders, all of which could be potential targets to accomplish these goals...

Words: 14868 - Pages: 60