Richard Dulski's firm is about to bid on a new radar system. Although the product uses new technology, Dulski believes that a learning rate of $75 \%$ is appropriate. The first unit is expected to take 700 hours, and the contract is for 40 units.

What is the total amount of hours to build the 40 units?

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 should he do?

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

What is the equally likely decision?

Which Lean techniques work in both the manufacturing and service sectors?

Leah Johnson, director of Urgent Care of Brookline, wants to increase capacity to provide low-cost flu shots but must decide whether to do so by hiring another full-time nurse or by using part-time nurses. The table below shows the expected costs of the two options for three possible demand levels:

Using expected value, what should Ms. Johnson do?

Why might the results of a simulation differ each time you make a run?

If it took 563 minutes to complete a hospital's first cornea transplant, and the hospital uses a $90 \%$ learning rate, what is the cumulative time to complete the first 16 transplants?

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:

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?

D. Shimshak Systems is installing networks for Advantage Insurance. The first installation took 46 labor-hours to complete. Estimate how long the 4th and the 8th installations will take for each of the following learning rates:

$$77 \%$$

Zhu Manufacturing is considering the introduction of a family of new products. Long-term demand for the product group is somewhat predictable, so the manufacturer must be concerned with the risk of choosing a process that is inappropriate. Faye Zhu is VP of operations. She can choose among batch manufacturing or custom manufacturing, or she can invest in group technology. Faye won't be able to forecast demand accurately until after she makes the process choice. Demand will be classified into four compartments: poor, fair, good, and excellent. The table below indicates the payoffs (profits) associated with each process/demand combination, as well as the probabilities of each long-term demand level:

What would Faye Zhu be willing to pay for a forecast that would accurately determine the level of demand in the future?

Girish Shambu and William Reisel are teammates at a discount store; their new job is assembling bicycles for customers. Assembly of a bike has a learning rate of $90 \%$. They forgot to time their effort on the first bike, but spent 4 hours on the second set. They have 6 more bikes to do. Determine approximately how much time will be (was) required for all 8 units

The Green Cab Company has a taxi waiting at each of four cabstands in Evanston, Illinois. Four customers have called and requested service. The distances, in miles, from the waiting taxis to the customers are given in the following table. Find the optimal assignment of taxis to customers so as to minimize total driving distances to the customers.

Discount-Mart (see Problem 16.8), as part of its new Lean program, has signed a long-term contract with Specialty Lighting and will place orders electronically for its halogen lamps. Ordering costs will drop to $\$ .50$ per order, but Discount-Mart also reassessed its carrying costs and raised them to $\$20$ per lamp.

What is the new economic order quantity?

Maggie Moylan Motorcycle Corp. uses kanbans to support its transmission assembly line. Determine the size of the kanban for the mainshaft assembly and the number of kanbans needed.

Setup cost $=\$ 20$

Annual holding cost of mainshaft assembly $=\$ 250$ per unit

Daily production $=300$ mainshafts

Annual usage $=20,000(=50$ weeks $\times 5$ days each $x$ daily usage of 80 mainshafts)

Lead time $=3$ days

Safety stock $=\frac{1}{2}$ day's production of mainshafts