Question: A young couple has $5,000 to

> Dubai airport has three immigration officers that inspect arriving tourists’ travel documents and permit them to enter the country if their visa is genuine. Each officer can check 20 tourists per hour (exponentially distributed). On an average, a tourist

> Partially completed products arrive at a workstation in a manufacturing operation at a mean rate of 40 per hour (Poisson distributed). The processing time at the workstation averages 1.2 minutes per unit (exponentially distributed). The manufacturing com

> Amanda Fall is starting up a new house painting business, Fall Colors. She has been advertising in the local newspaper for several months. Based on inquiries and informal surveys of the local housing market, she anticipates that she will get painting job

> Hudson Valley Books is a small, independent publisher of fiction and nonfiction books. Each week the publisher receives an average of seven unsolicited manuscripts to review (Poisson distributed). The publisher has 12 freelance reviewers in the area who

> The Escargot is a small French restaurant with six waiters and waitresses. The average service time at the restaurant for a table (of any size) is 85 minutes (Poisson distributed). The restaurant does not take reservations, and parties arrive for dinner

> Since the terrorist attacks of 9/11 and because of the ensu- ing measures to increase airline security, airports have faced the problem of long waiting lines and waiting times at secu- rity gates. Waiting lines can be as long as hundreds of yards, and wa

> The ticket booth on the Tech campus is operated by one person, who is selling tickets for the annual Tech versus State football game on Saturday. The ticket seller can serve an average of 12 customers per hour; on average, 10 customers arrive to purchase

> Maggie Attaberry is a nurse on the evening shift from 10:00 p.M. to 6:00 A.M. at Community Hospital. She has 15 patients for whom she is responsible in her area. She averages two calls from each of her patients every evening, on average (Poisson distribu

> In Problem 37, suppose that Moore’s television repair service cannot accommodate more than 30 TV sets at a time. What is the probability that the number of TV sets on hand (under repair and waiting for service) will exceed the shop capacity?

> Moore’s television repair service receives an average of six TV sets per 8-hour day to be repaired. The service manager would like to be able to tell customers that they can expect 1-day service. What average repair time per set will the repair shop have

> When customers arrive at Gilley’s Ice Cream Shop, they take a number and wait to be called to purchase ice cream from one of the counter servers. From experience in past summers, the store’s staff knows that customers arrive at a rate of 40 per hour on s

> The Footrite Shoe Company is going to open a new branch at a mall, and company managers are attempting to determine how many salespeople to hire. Based on an analysis of mall traffic, the company estimates that customers will arrive at the store at a rat

> The Riverview Clinic has two general practitioners who see patients daily. An average of six patients arrive at the clinic per hour. Each doctor spends an average of 15 minutes with a patient. The patients wait in a waiting area until one of the two doct

> Customers arrive to check in at the exclusive and expensive Regency Hotel’s lobby at a rate of 40 per hour (Poisson distributed). The hotel normally has three clerks available at the desk to check in guests. The average time for a clerk to check in a gue

> From 3:00 p.M. to 8:00 p.M. the local K-Star Supermarket has a steady stream of customers. Customers finish shopping and arrive at the checkout area at a rate of 70 per hour (Poisson distributed). It is assumed that when customers arrive at the cash regi

> The local Burger Doodle fast-food restaurant has a drive-through window. Customers in cars arrive at the window at the rate of 10 per hour (Poisson distributed). It requires an average of 4 minutes (exponentially distributed) to take and fill an order. T

> The Valley Swim Club has 300 stockholders, each holding one share of stock in the club. A share of club stock allows the shareholder’s family to use the club’s heated outdoor pool during the summer, upon payment of ann

> On December 16, 1944, in the last year of World War II, two German panzer armies, supported by a third army of infantry, together totaling more than 250,000 men, staged a massive counteroffensive in northern France, overwhelming the American First Army i

> The Regency Hotel has enough space at its entrance for six taxicabs to line up, wait for guests, and then load passengers. Cabs arrive at the hotel every 8 minutes; if a taxi drives by the hotel and the line is full, it must drive on. Hotel guests requir

> A single-server queuing system with an infinite calling population and a first-come, first-served queue discipline has the following arrival and service rates (Poisson distributed):  = 16 customers per hour  = 24 customers per hour Determine P0, P3, L,

> A company has 20 computers in its office in Johannesburg. Though the computers are brand new, they do fail and this affects the company’s work. A computer crashes every 25 days. The company estimates that it loses R10,000 a day from a faulty computer. Si

> The associate dean of the college of business at Tech is determining which of two copiers he should lease for the college’s administrative suite. A regular copier leases for $8 per hour, and it takes an employee an average of 6 minutes (exponentially dis

> Cakes baked by the Freshfood Bakery are transported from the ovens to be packaged by one of three wrappers. Each wrapper can wrap an average of 200 cakes per hour. The cakes are brought to the wrappers at the rate of 500 per hour. If a cake sits longer t

> In Problem14 , the Dynaco Company has found that if more than three units (average) are waiting to be processed at any one workstation, then too much money is being tied up in work-in-process inventory (i.e., units waiting to be processed). The company e

> The Riverton Post Office has four stations for service. Customers line up in single file for service on a FIFO basis. The mean arrival rate is 40 per hour, Poisson distributed, and the mean service time per server is 4 minutes, exponentially distributed.

> The College Avenue Sub Shop is located in a small college town. Virtually all of its phone delivery orders are in the evening, between 5:00 p.M. and 1:00 A.M., so the shop has a delivery person for that time period. It receives an average of about 3 orde

> In Problem 10, in addition to course approvals, suppose that the advisor also answers questions and provides course counseling, such that the service time can no longer be assumed to be exponentially distributed. Instead, the service time distribution is

> The Rowntown Cab Company has four cabs that are on duty during normal business hours. The cab company dispatcher receives requests for service every 8 minutes, on average, according to an exponential distribution. The average time to complete a trip is 2

> The University Bookstore is owned and operated by State University through an independent corporation with its own board of directors. The bookstore has three locations on or near the State University campus. It stocks a range of items, including textboo

> The Bay City Police Department has eight patrol cars that are on constant call 24 hours per day. A patrol car requires repairs every 20 days, on average, according to an exponential distribution. When a patrol car is in need of repair, it is driven into

> NesCafé has installed a coffee vending machine at an airport. The installed vending machine has the capacity to dispense 25 cups of coffee per hour. Currently, the demand for coffee on average is 22 cups per hour. NesCafé has noticed through its sales th

> In the Fast Shop Market example in this chapter, Alternative II was to add a new checkout counter at the market. This alternative was analyzed using the single-server model. Why was the multiple- server model not used?

> A vending machine at City Airport dispenses hot coffee, hot chocolate, or hot tea, in a constant service time of 20 seconds. Customers arrive at the vending machine at a mean rate of 60 per hour (Poisson distributed). Determine the average length of the

> An ATM at a busy airport disburses money or accepts deposits from customers. The ATM takes a constant time of 2 minutes to accept instructions and complete a transaction. If customers arrive at the rate of 20 per hour (Poisson distributed), a. Determine

> Game World, a video game arcade at Tanglewood Mall, has just installed a new virtual reality battle game. It requires exactly 2.7 minutes to play. Customers arrive, on average, every 2.9 minutes (Poisson distributed) to play the game. How long will the l

> McBurger’s fast-food restaurant has a drive-through window with a single server who takes orders from an intercom and also is the cashier. The window operator is assisted by other employees who prepare the orders. Customers arrive at the ordering station

> The Acme Machine Shop has five machines that periodically break down and require service. The average time between breakdowns is 4 days, distributed according to an exponential distribution. The average time to repair a machine is 1 day, distributed acco

> The Dynaco Manufacturing Company has an assembly line that feeds two drill presses. As partially completed products come off the line, they are lined up to be worked on as drill presses become available. The units arrive at the workstation (containing bo

> In Problem 10, the dean of the college of business at State University is considering the addition of a second adviser in the college advising office to serve students waiting to have their schedules approved. This new adviser could serve the same number

> During the past few years, the legislature has severely reduced funding for State University. In reaction, the administration at State has significantly raised tuition each year for the past 5 years. Perceived as a bargain 5 years ago, State is now consi

> In Problem 11, suppose passing truck drivers look to see how many trucks are waiting to be weighed at the weigh station. If they see four or more trucks in line, they will pass by the station and risk being caught and ticketed. What is the probability th

> All trucks traveling on Interstate 40 between Albuquerque and Amarillo are required to stop at a weigh station. Trucks arrive at the weigh station at a rate of 200 per 8-hour day, and the station can weigh, on the average, 220 trucks per day. a. Determin

> During registration at State University every semester, students in the college of business must have their courses approved by the college adviser. It takes the adviser an average of 2 minutes to approve each schedule, and students arrive at the adviser

> For each of the following queuing systems, indicate whether it is a single- or multiple-server model, the queue discipline, and whether its calling population is infinite or finite. a. Hair salon b. Bank c. Laundromat d. Doctor’s office e. Adviser’s offi

> A television network is attempting to decide during the summer which of the following three football games to televise on the Saturday following Thanksgiving Day: Alabama versus Auburn, Georgia versus Georgia Tech, or Army versus Navy. The estimated view

> A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the

> The owner of the Columbia Construction Company must decide between building a housing development, constructing a shopping center, and leasing all the company’s equipment to another company. The profit that will result from each alterna

> Labran Jones has played for the Cleveland professional basketball team for the past eight seasons and has established himself as one of the top players in the league. He has recently become a free agent, meaning he can sign a new contract with Cleveland

> Annie Hays recently sold a condominium she had bought and lived in while she was a college student over 15 years ago. She received $150,000 for the condominium and is considering two investment alternatives. Annie can invest the entire amount in a bank m

> Concerned about recent weather-related disasters, fires, and other calamities at universities around the country, university administrators at Tech have initiated several planning projects to determine how effectively local emergency facilities can handl

> The Place-Plus real estate development firm in Problem 26 is dissatisfied with the economist’s estimate of the probabilities of future interest rate movement, so it is considering having a financial consulting firm provide a report on future interest rat

> In Problem 14, the management of the Oakland Bombers is considering hiring superscout Jerry McGuire to evaluate the team’s chances for the coming season. McGuire will evaluate the team, assuming that it will sign one of the four free agents. The team’s m

> In Problem 61, the decision analysis is for automobiles and light trucks. Blue Ridge Power and Light would like to reformulate the problem for its heavy construction equipment. Emergency maintenance is much more expensive for heavy equipment, costing $15

> Blue Ridge Power and Light is an electric utility company with a large fleet of vehicles, including automobiles, light trucks, and construction equipment. The company is evaluating four alternative strategies for maintaining its vehicles at the lowest co

> Ellie Daniels has $200,000 and is considering three mutual funds for investment—a global fund, an index fund, and an Internet stock fund. During the first year of investment, Ellie estimates that there is a .70 probability that the mark

> A company must decide now which of three products to make next year to plan and order proper materials. The cost per unit of producing each product will be determined by whether a new union labor contract passes or fails. The cost per unit for each produ

> In Problem 58, determine the expected value of sample information (EVSI; i.e., the test market value) and the expected value of perfect information (EVPI).

> Kroft Food Products is attempting to decide whether it should introduce a new line of salad dressings called Special Choices. The company can test market the salad dressings in selected geographic areas or bypass the test market and introduce the product

> A car manufacturer buys fasteners such as bolts and nuts for its cars. On an average, the company buys 1 million such pairs per month. The company inspects the arriving lots and transfers the lots to its store yard. The price that Suppliers A and B charg

> Tech has three health care plans for its faculty and staff to choose from, as follows: Plan 1—monthly cost of $32, with a $500 deductible; the participants pay the first $500 of medical costs for the year; the insurer pays 90% of all re

> The U.S. Army Corps of Engineers has historically constructed dams on various rivers in the southeastern United States. Its primary instrument for evaluating and selecting among many projects under consideration is benefit–cost analysis

> Jay Seago is suing the manufacturer of his car for $3.5 million because of a defect that he believes caused him to have an accident. The accident kept him out of work for a year. The company has offered him a settlement of $700,000, of which Jay would re

> Tech is playing State in the last conference game of the season. Tech is trailing State 21 to 14, with 7 seconds left in the game, when Tech scores a touchdown. Still trailing 21 to 20, Tech can either go for 2 points and win or go for 1 point to send th

> If Suntrek, in Problem 36, wants to hire a supply chain analyst to help it determine more accurately what future logistics costs will be, what is the maximum amount they should pay the analyst?

> In Problems 10 and 23, Ann Tyler is considering hiring a financial analyst to help her determine the best investment. What is the maximum amount she should pay an analyst?

> Jeffrey Mogul is a Hollywood film producer, and he is currently evaluating a script by a new screenwriter and director, Betty Jo Thurston. Jeffrey knows that the probability of a film by a new director being a success is about .10 and that the probabilit

> Refer to Problem 43. Volkswagen considers hiring a consultant. If a consultant helps Volkswagen by giving perfect information, what is the expected value of perfect information?

> A farmer in Georgia must decide which crop to plant next year on his land: corn, peanuts, or soybeans. The return from each crop will be determined by whether a new trade bill with Russia passes the Senate. The profit the farmer will realize from each cr

> The Miramar Company in Problem 20 is considering contracting with a market research firm to do a survey to determine future market conditions. The results of the survey will indicate either positive or negative market conditions. There is a .60 probabili

> The machine shop owner in Problem 17 is considering hiring a military consultant to ascertain whether the shop will get the government contract. The consultant is a former military officer who uses various personal contacts to find out such information.

> The Americo Oil Company is considering making a bid for a shale oil development contract to be awarded by the federal government. The company has decided to bid $112 million. The company estimates that it has a 60% chance of winning the contract with thi

> James Banks was standing in line next to Robin Cole at Klecko’s Copy Center, waiting to use one of the copy machines. “Gee, Robin, I hate this,” he said. “We have to drive all the wa

> The management of First American Bank was concerned about the potential loss that might occur in the event of a physical catastrophe such as a power failure or a fire. The bank estimated that the loss from one of these incidents could be as much as $100

> Given the following sequential decision tree, determine which is the optimal investment, A or B:

> Construct a decision tree for the decision situation of Volkswagen in Problem 43 and indicate the best decision.

> Volkswagen Germany plans to manufacture six of its models for the next near. Its manufacturing facility can produce Polo, Vento, Ameo, GTI, Tiguan, and Passat. Though it produces all these models, it wants to focus only on the car with the highest sales.

> The Blue Sox American League baseball team is going to enter the free-agent market over the winter to sign a new starting pitcher. They are considering five prospects who will enter the free- agent market. All five pitchers are in their mid-20s, have bee

> In Problem 40, the director of career advising at Orange Community College has paid a small fee to a local investment firm to indicate a probability for each future economic condition over the next 5 years. The firm estimates that there is a .20 probabil

> The director of career advising at Orange Community College wants to use decision analysis to provide information to help students decide which 2-year degree program they should pursue. The director has set up the following payoff table for six of the mo

> Brooke Bentley, a student in business administration, is trying to decide which management science course to take next quarter—I, II, or III. “Steamboat” Fulton, “Deathâ€&

> In Problem 14, the Bombers’ management has determined the following probabilities of the occurrence of each future season outcome for each player: Compute the expected value for each player, and indicate which player the team should try

> In Problem 37, Federated Electronics, Ltd., has hired a Washington, DC–based global trade research firm to assess the probabilities of each combination of port and government conditions for the five ports. The research firm probability

> In the “Forecasting Airport Passenger Arrivals” case problem in Chapter 15, the objective is to develop a forecasting model to predict daily airline passenger arrivals for 2-hour time segments from 4:00 A.M. to 10:00 p.M. for July at Berry International

> Federated Electronics, Ltd., manufactures display screens and monitors for computers and televisions, which it sells to companies around the world. It wants to construct a new ware- house and distribution center in Asia to serve emerging markets there. I

> Suntrek in Problem 35 estimates that the probabilities of future changes in global logistics costs are 0.09 that they will decrease, 0.27 that they will remain the same, and 0.64 that they will increase. Determine the best supplier for the company using

> Suntrek, a global apparel company, is adding a new supplier for denim fabric that it uses to manufacture denim jeans, and the suppliers it’s considering are located near the ports of Shanghai, Mumbai, Manila, Santos, and Veracruz. A maj

> Foxcomp in Problem 33 estimates that the probabilities of the severity of events in each of the countries are as follows: Determine the best decision for Foxcomp using expected value.

> Foxcomp, an electronics and computer manufacturer with a global supply chain, wants to add a new supplier for some of its component parts, and the suppliers it’s considering are in Taiwan, India, Thailand, and the Philippines. As part o

> Assume that the probabilities of demand in Problem 30 are no longer valid; the decision situation is now one without probabilities. Determine the best number of boxes of cards to stock, using the following decision criteria. a. Maximin b. Maximax c. Hurw

> The Palm Garden Greenhouse specializes in raising carnations that are sold to florists. Carnations are sold for $3.00 per dozen; the cost of growing the carnations and distributing them to the florists is $2.00 per dozen. Any carnations left at the end o

> The manager of the greeting card section of Mazey’s department store is considering her order for a particular line of Christmas cards. The cost of each box of cards is $3; each box will be sold for $5 during the Christmas season. After

> Stevie Stone, a bellhop at the Royal Sundown Hotel in Atlanta, has been offered a management position. Although accepting the offer would assure him a job if there was a recession, if good economic conditions prevailed, he would actually make less money

> The Loebuck Grocery must decide how many cases of milk to stock each week to meet demand. The probability distribution of demand during a week is shown in the following table: Each case costs the grocer $10 and sells for $12. Unsold cases are sold to a l

> Two area hospitals have jointly initiated several planning projects to determine how effectively their emergency facilities can handle disaster-related situations at nearby Tech University. These disasters could be weather related (such as a tornado), a

> The Steak and Chop Butcher Shop purchases steak from a local meatpacking house. The meat is purchased on Monday at $2.00 per pound, and the shop sells the steak for $3.00 per pound. Any steak left over at the end of the week is sold to a local zoo for $.

> Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership. They have three offers: from a foreign compact car company, from a U.S. producer of full-sized cars, and from a truck company. The success of each type of

> In Problem 13, the Place-Plus real estate development firm has hired an economist to assign a probability to each direction interest rates may take over the next 5 years. The economist has determined that there is a .50 probability that interest rates wi

> A global economist hired by Microcomp, the U.S.-based computer manufacturer in Problem 12, estimates that the probability that the economic and political climate overseas and in Mexico will decline during the next 5 years is .40, the probability that it

> In Problem 11, the Tech coaches have reviewed game films and have determined the following probabilities that State will use each of its defenses: a. Using expected value, rank Tech’s plays from best to worst. b. During the actual game,

> In Problem 10, Ann Tyler, with the help of a financial newsletter and some library research, has been able to assign probabilities to each of the possible interest rates during the next year, as follows: Using expected value, determine her best investmen