due wednsday

## QAS 19 Decision Analysis

## Due February 6

**Note:
**

· You should do additional exercises from the textbook to improve your understanding of the material.

· Show your work to get credit. See the course outline for a description of how assignments should be done.

· This assignment should be typed.

1. p. 21 11

2. A computer rework center has the capacity to rework 300 computers per day. The expected number of computers needing to be reworked per day is 225. The center is paid $26 for each computer reworked. The fixed cost of renting the reworking equipment is $250 per day. Work space rents for $150 per day. The cost of material is $18 per computer and labor costs $3 per computer.

a.

What is the break-even number of computers reworked per day?

b.

If 210 computers are reworked on a given day, what is the center’s profit?

3. Refer to Problem 39 on page 76.

a. Define decision variables that will tell how many units of each fund Innis should purchase.

b. Develop an objective function that will minimize the total risk index for the portfolio.

c. Develop constraints for the investment.

4. Refer to Problem 41 on page 77.

Develop a linear programming model that can be used to determine the number of gallons of regular gasoline and the number of gallons of premium gasoline that should be produced in order to maximize total profit contribution.

5.

A jewelry designer makes necklaces and earrings each week to sell at a local boutique. The boutique will buy between 10 and 40 necklaces each week. Based on last month’s sales, each week the boutique bought at least twice the number of earrings as necklaces from the designer. The designer cannot make more than 50 pieces of jewelry per week. Suppose that the necklaces make the designer a profit of $25 each piece and the earrings make a profit of $10 each piece. Develop a linear programming model that will tell the designer how many necklaces and earrings should be sold to the boutique each week so as to maximize the designer’s weekly profit.

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