2. Suppose retail water demand is given by wa = 70-p and the marginal cost of retail water is mc = 0.00125w². Currently the supplier cannot fulfill the quantity demanded under marginal-cost pricing, because natural water is in short supply. Suppose that only 32 units of natural water are available. Due to system leakage and evaporation, the relationship between natural water pumped and retail water received is Wntrl - 10 1.1 What is the value of an action to increase natural water availability to 43 units? Wrtl=
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- Problem 6Cannes Croissants (not a real company) wishes to determine the optimum production quantity for its topselling product, almond croissants. The annual demandfor almond croissants is 12,000 units. The setup costs fora production run of the croissants is US$15. The holdingcost per unit per year is US$0.50. Production is mostefficient when 80 croissants are produced per day. Thecompany operates 300 days during a year.a What is the economic production quantity (EPQ)?b How many production runs will there by per year?c What is the maximum inventory level?d What is the total annual cost (in US dollars)?e What is the length of a production run in days?A toy manufacturer makes miniature trucks. The pricep(in dollar) and the demandx(numberof miniature trucks) are related by the equation 6000−600p=x. The total cost for the sametoy manufacturer to producexminiature trucks can be modeled byC(x) = 8x+ 450.(a) (10 points) Express the pricepin terms of the demandx. Find the revenueR(x) if themanufacturer sellsxminiature trucks in a month and find the domain of this function.(b) (10 points) Graph the cost and revenue functions on the same coordinate system for 0≤x≤6000.(c) (10 points) What is the minimum number of trucks the toy manufacturer must sell tobreak even?(d) (10 points) FindP′(300) and interpret the result.(e) (10 points) What is the exact profit from the sale of the 301stminiature truck?4. Consider the following transportation problem: Тo (cost) From 1 2 3 Supply A $ 6 $ 9 $100 130 В 12 3 70 C 4 8 11 100 Demand 80 110 60 Formulate this problem as a linear programming model and solve it by using the computer.
- The Talbot Company uses electrical assemblies to produce an array of small appliances. One of its high cost / high volume assemblies, the XO-01, has an estimated annual demand of 8,000 units. Talbot estimates the cost to place an order is $50, and the holding cost for each assembly is $20 per year. The company operates 250 days per year.The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct? Quantity VC FC TC AVC MC 30 30 1 12 В 12 E 2 25 C F 3 A 72 14 A = 42; E = 12 A = 70; E = 12 A = 42; E = 40 A = 70; E = 40)A two Product finm faces the follow- = 40-2P1 demand and Cost function 8- a) Find the output levels that satiaty the 12 demand amd 40-2P,-P2 タ,=35-P、- 8 follow- ng Cont function8 32 Demand function. C%=8it 20+ 10 cost function. a) Find the output levels that sati. order Conditions ythe tor maximum profit. 6)check the 2nd (ondition. Can you conclude that this Problem Posses a Order for sufficient unique maximum) c)What in the maximal profit?
- Systems applicationSolve and analyze the following problems. Make sure all the steps are properly justified. Correctly use mathematical notation or terminology. Interpret the solution in the context of the problem.Suppose the supply and demand equations for printed shirts for a graduating class are given byp = 0.7q + 3p = -1.7q +15where p is the price in dollars and q is the quantity in hundreds.Determine supply and demand if the shirts cost $ 9.00. Analyze and discuss the stability of the shirt market at this price level. Prepare the graph of the two equations in the same coordinate system and identify the equilibrium point, the supply curve, and the demand curve.How must the following cost and requirements table for a transportation problem be altered so that linear programming methods can be used to find an optimum solution? . destination source A B D supply 1 C 1A C 1B 4 2 C 2A C 2B 6 2 3 6 2 7 3 demand OA. A dummy source must be added to supply six units. B. A dummy destination must be added to increase the demand by six units. C. The sum of the costs in each row must be made equal by inclusion of a dummy cost. D. The sum of the costs in each column must be made equal by inclusion of a dummy cost.. A major cattle feeding operation has entered into a firm commitment to buy 100,000bushels of corn to be delivered to its feed lot in Kansas. The corn is expected to be delivered in90 days. The company is committed to pay $1.50 per bushel. If corn yields are greater thanexpected, the price of corn could decline and the company would experience higher operatingcosts than necessary as a result of the commitment.In order to protect itself against falling corn prices, the company purchased an option to sellcorn in 90 days at a strike price of $1.51 per bushel delivered to a facility in Nebraska.1. Assume that at the time of acquiring the put option, the price of corn was more than $1.51.Explain why the option had a value of more than zero at inception.2. Assume that one of your colleagues made the following comment: ‘‘An option can neverhave a negative value; therefore, you can never lose money on an option.’’ Discuss whetheror not you agree with your colleague.3. Assuming that only the…
- The Nike accounting firm analyzes the price-demand relationship toconclude that x thousand shoes will sell if offered for a unit price (in dollars) of p(x) = 130−0.1x. Suppose further that the total cost of production was tracked to be $530,000 up until production of the first thousand shoes, and that this cost increased linearly to $560,000 by the time of production ofthe 2000th shoe. Find the following quantities, and interpret your results(describe what these quantities represent). a) Marginal revenue when x= 100 b) Average profit when x= 500VannasBrew produces raspberry lemonade and sells it competitively. To secure its activity, VannasBrew must rent a factory space at the cost of 15 00O SEK/month. The production of one bottle of raspberry lemonade costs the firm 32 SEK. As long as its monthly production is less than 40 000 bottles a month, VannasBrew can store its output on its own premises before it is shipped to the stores. If the production exceeds 40 000 bottles the company can rent additional storage at the cost of 2 SEK/bottle per month. (a) Describe the firm's average fixed cost, average variable cost, average cost, and its marginal cost. (b) Assume the current market price for a bottle of raspberry lemonade is 33 SEK/bottle. Explain how much the firm should produce in order to maximise its profits. Calculate the profits of the firm. (c) VannasBrew could increase its own storage capacity to 60 000. This means that if its production exceeds 60 000 the firm will rent additional storage capacity at the cost of 2…a.A clothing manufacturer makes trousers, skirts and blouses. Each trouser requires 20 minutes of cutting time, 60 minutes of sewing time and 5 minutes of packagingtime. Each skirt requires 15 minutes of cutting time, 30 minutes of sewing time and 12 minutes of packaging time. Each blouse requires 10 minutes of cutting time, 24 minutes of sewing time and 6 minutes of packaging time.The amount of time available for cutting, sewing and packaging is 115 hours, 280 hours and 65 hours respectively. Using either the ??????? ?????? ?? ?????????'? ????, determine how many of each type of clothing should be made to use all available labour hours?