Jerry Bildery's factory is considering three approaches for meeting an expected increase in demand. These three approaches are increasing capacity, using overtime, and buying more equipment. Demand will increase either slightly $(S)$, moderately $(\mathrm{M})$, or greatly $(\mathrm{G})$. The profits for each approach under each possible scenario are as follows:

	DEMAND SCENARIO
APPROACH	S	M	G
Increasing capacity	$\$700,000$	$\$700,000$	$\$700,000$
Using overtime	$\$500,000$	$\$600,000$	$\$1,000,000$
Buying equipment	$\$600,000$	$\$800,000$	$\$800,000$

Since the goal is to maximize, and Jerry is risk-neutral, he decides to use the equally likely decision criterion to make the decision as to which approach to use. According to this criterion, which approach should be used?

What is Total Quality Management (TQM)?

Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of $0.4$ that the ATR $\mathrm{Co}$. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss's expected profit is $\$ 40,000$; if Weiss adds an assembly line and ATR follows suit, Weiss still expects $\$ 10,000$ profit. If Weiss adds a new plant addition and ATR does not produce a competitive product, Weiss expects a profit of $\$ 600,000$; if ATR does compete for this market, Weiss expects a loss of $\$ 100,000$.

Compute the expected value of perfect information.

Andrew Thomas, a sandwich vendor at Hard Rock Cafe's annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd):

The probabilities associated with the states of nature are $0.3$ for a big demand, $0.5$ for an average demand, and $0.2$ for a small demand.

Compute the expected value of perfect information (EVPI).

After being observed many times, Beverly Demarr, a hospital lab analyst, had an average observed time for blood tests of 12 minutes. Beverly's performance rating is 105%. The hospital has a personal, fatigue, and delay allowance of 16%. Find the normal time for this process.

Supervisor Kenneth Peterson wants to determine the percent of time a machine in his area is idle. He decides to use work sampling, and his initial estimate is that the machine is idle $20 \%$ of the time. How many observations should Peterson take to be $98 \%$ confident that the results will be less than $5 \%$ from the true results?

Jeffrey Helm owns a health and fitness center called Bulk-Up in Harrisburg. He is considering adding more floor space to meet increasing demand. He will either add no floor space $(\mathrm{N})$, a moderate area of floor space $(\mathrm{M})$, a large area of floor space (L), or an area of floor space that doubles the size of the facility (D). Demand will either stay fixed, increase slightly, or increase greatly. The following are the changes in Bulk-Up's annual profits under each combination of expansion level and demand change level:

Jeffrey is risk averse and wishes to use the maximin criterion.

What are his decision alternatives and what are the states of nature?

Borges Machine Shop, Inc., has a 1-year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:

Which process is best for this contract?

What is the minimum cost of crashing the following project that Roger Solano manages at Slippery Rock University by 4 days?

Market Focus is a marketing research firm that organizes focus groups for consumer-product companies. Each focus group has eight individuals who are paid $60 per session to provide comments on new products. These focus groups meet in hotels and are led by a trained, independent marketing specialist hired by Market Focus. Each specialist is paid a fixed retainer to conduct a minimum number of sessions and a per session fee of$2,200. A Market Focus staff member attends each session to ensure that all the logistical aspects run smoothly. a. Direct or indirect (D or I) costs of each individual focus group. b. Variable or fixed (V or F) costs of how the total costs of Market Focus change as the number of focus groups conducted changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the number of groups conducted.) You will have two answers (D or I; V or F) for each of the following items: Cost Item D or I V or F A. Payment to individuals in each focus group to provide comments on new products B. Annual subscription of Market Focus to Consumer Reports magazine C. Phone calls made by Market Focus staff member to confirm individuals will attend a focus group session (Records of individual calls are not kept.) D. Retainer paid to focus group leader to conduct 18 focus groups per year on new medical products E. Recruiting cost to hire marketing specialists F. Lease payment by Market Focus for corporate office G. Cost of tapes used to record comments made by individuals in a focus group session (These tapes are sent to the company whose products are being tested.) H. Gasoline costs of Market Focus staff for company-owned vehicles (Staff members submit monthly bills with no mileage breakdowns.) I. Costs incurred to improve the design of focus groups to make them more effective

Borges Machine Shop, Inc., has a 1-year contract for the production of $200,000$ gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:

Which process is best for this contract?

An avant-garde clothing manufacturer runs a series of high-profile, risqué ads on a billboard on Highway 101 and regularly collects protest calls from people who are offended by them. The company has no idea how many people in total see the ads, but it has been collecting statistics on the number of phone calls from irate viewers:

What percent of the total complaints can be attributed to the most prevalent complaint?

Lillian Fok is president of Lakefront Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources:

What is the percent change in multifactor productivity if Fok can reduce the energy bill by $\$ 1,000$ per day without cutting production or changing any other inputs?

Make a process chart for changing the right rear tire on an automobile.