Although financial data are sketchy, an estimate from a construction company indicates that adding bed capacity would cost about $\$100,000$ per bed. In addition, the rate charged for the hernia surgery varies between about $\$900$ and $\$2,000$ (U.S. dollars), with an average rate of $\$1,300$ per operation. The surgeons are paid a flat $\$600$ per operation. Due to all the uncertainties in government healthcare legislation, Shouldice would like to justify any expansion within a five-year time period.

In Psychological Science (Vol. 22, 2011), researchers reported that a chief executive officer's facial structure can be used to predict a firm's financial performance. The study involved measuring the facial width-to-height ratio (WHR) for each in a sample of 55 CEOs at publicly traded Fortune 500 firms. These WHR values (determined by computer analyzing a photo of the CEO's face) had a mean of $\bar{x}=1.96$ and a standard deviation of $s = .15$.
Find and interpret a 95% confidence interval for $\mu$, the mean facial WHR for all CEOs at publicly traded Fortune 500 firms.

AlwaysRain Irrigation, Inc. would like to determine capacity requirements for the next four years. Currently, two production lines are in place for making bronze and plastic sprinklers. Three types of sprinklers are available in both bronze and plastic: 90-degree nozzle sprinklers, 180-degree nozzle sprinklers, and 360-degree nozzle sprinklers. Management has forecast demand for the next four years as follows. Both production lines can produce all the different types of nozzles. The bronze machines needed for the bronze sprinklers require two operators and can produce up to 12,000 sprinklers. The plastic injection molding machine needed for the plastic sprinklers requires four operators and can produce up to 200,000 sprinklers. Three bronze machines and only one injection molding machine are available. What are the capacity requirements for the next four years? (Assume that there is no learning.)

How well is the hospital currently utilizing its beds?

Where would you place Shouldice Hospital on the product–process framework? What are the implications of adding a specialty such as cosmetic surgery?

Refer to the Exhibit .Why is it that the critical zone begins at a utilization rate of about 70 percent in a typical service operation? Draw upon your own experiences as either a customer or a server in common service establishments.

Identify the type of sample described. A taxicab company wants to know whether its customers are satisfied with their service. Drivers survey every tenth customer during the day.

Develop a similar table to show the effects of adding operations on Saturday. (Assume that 30 operations would still be performed each day.) How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients?

As operations manager, you are concerned about being able to meet sales requirements in the coming months. You have just been given the following production report:

Find the average of the monthly productivity figures (units per machine hour).

Exhibit $5.7$ is a room-occupancy table for the existing system. Each row in the table follows the patients who checked in on a given day. The columns indicate the number of patients in the hospital on a given day. For example, the first row of the table shows that $30$ people checked in on Monday and were in the hospital for Monday, Tuesday, and Wednesday. By summing the columns of the table for Wednesday, we see that there are $90$ patients staying in the hospital that day.

Develop a similar table to show the effects of adding operations on Saturday. (Assume that $30$ operationswould still be performed each day.) How would this affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients?(Hint: Look at the capacity of the $12$ surgeons and the five operating rooms.)

Exhibit $5.7$

$$\begin{array}{lccccccc} \hline &&&\text { Beds Required }\\ \hline \text{Check-in Day}& \text{Monday} & \text{Tuesday} & \text{Wednesday} & \text{Thursday} & \text{Friday} & \text{Saturday} & \text{Sunday} \\ \hline \text{Monday} & 30 & 30 & 30 & & & & \\ \hline \text{Tuesday} & & 30 & 30 & 30 & & \\ \hline \text{Wednesday} & & & 30 & 30 & 30 & \\ \hline \text{Thursday} & & & & 30 & 30 & 30 \\ \hline \text{Friday}\\ \hline \text{Saturday}\\ \hline \text{Sunday} & 30 & 30 & & & & & 30 \\ \hline \text{Total} & 60 & 90 & 90 & 90 & 60 & 30 & 30 \\ \hline \end{array}$$

The sales data for two years are as follows. Data are aggregated with two months of sales in each “period.” In addition to the regression model, determine multiplicative seasonal indexes. A full cycle is assumed to be a full year.

Match the following product types to the appropriate product development description.

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Technology-push products

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Platform products

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Process-intensive products

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High-risk products

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Quick-build products

A. Entail unusually large uncertainties about the technology or market. The development process takes steps to address those uncertainties.

B. A firm with a new proprietary technology seeks out a market where that technology can be applied.

C. Uses a repeated prototyping cycle. Results from one cycle are used to modify priorities in the ensuing cycle.

D. The production process has an impact on the product properties. Therefore, product design and process design cannot be separated.

E. Products are designed and built around a preexisting technological subsystem.

The local supermarket buys lettuce each day to ensure really fresh produce. Each morning, any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week, the supermarket can buy fresh lettuce for $\$4.00$ a box. The lettuce is sold for $\$10.00$ a box and the dealer that sells old lettuce is willing to pay $\$1.50$ a box. Past history says that tomorrow’s demand for lettuce averages 250 boxes with a standard deviation of 34 boxes. How many boxes of lettuce should the supermarket purchase tomorrow?

Lieutenant Commander Data is planning to make his monthly (every 30 days) trek to Gamma Hydra City to pick up a supply of isolinear chips. The trip will take Data about two days. Before he leaves, he calls in the order to the GHC Supply Store. He uses chips at an average rate of 5 per day (seven days per week) with a standard deviation of demand of 1 per day. He needs a 98 percent service probability. If he currently has 35 chips in inventory, how many should he order? What is the most he will ever have to order?