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Homework Assignment I

The document discusses a materials manager, Tej Dhakar, who must determine whether to make or buy a new semiconductor for an upcoming wrist TV product. There are costs and probabilities associated with making or buying the semiconductor. Making it initially has a 40% chance of success and 60% chance of failure, while buying it would cost $0.50 per unit plus $1 million in vendor costs. The best decision is determined using the costs and probabilities to minimize risk to the company. The worst outcome is multiple failed attempts to make it successfully, while the best is a successful first attempt. A second summary discusses a manufacturer evaluating preliminary designs for two grass trimmers based on their revenue potential to determine the better environmental option.

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Maliha Rehman
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1K views1 page

Homework Assignment I

The document discusses a materials manager, Tej Dhakar, who must determine whether to make or buy a new semiconductor for an upcoming wrist TV product. There are costs and probabilities associated with making or buying the semiconductor. Making it initially has a 40% chance of success and 60% chance of failure, while buying it would cost $0.50 per unit plus $1 million in vendor costs. The best decision is determined using the costs and probabilities to minimize risk to the company. The worst outcome is multiple failed attempts to make it successfully, while the best is a successful first attempt. A second summary discusses a manufacturer evaluating preliminary designs for two grass trimmers based on their revenue potential to determine the better environmental option.

Uploaded by

Maliha Rehman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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HW. 1 . Due to 06.03.

2019

5.10 Draw an assembly chart for a pair of eyeglasses and its case.

5.24 Ritz Products’s materials manager, Tej Dhakar, must determine whether to
make or buy a new semiconductor for the wrist TV that the firm is about to produce.
One million units are expected to be produced over the life cycle. If the product is
made, start-up and production costs of the make decision total$1 million, with a
probability of .4 that the product will be satisfactory and a .6 probability that it will not.
If the product is not satisfactory, the firm will have to reevaluate the decision. If the
decision is reevaluated, the choice will be whether to spend another $1 million to
redesign the semiconductor or to purchase. Likelihood of success the second time
that the make decision is made is .9. If the second make decision also fails, the firm
must purchase. Regardless of when the purchase takes place, Dhakar’s best
judgment of cost is that Ritz will pay $.50 for each purchased semiconductor plus $1
million in vendor development cost.
a) Assuming that Ritz must have the semiconductor (stopping or doing without is not
a viable option), what is the best decision?
b) What criteria did you use to make this decision?
c) What is the worst that can happen to Ritz as a result of this particular decision?
What is the best that can happen?

S5.12 Green Forever, a manufacturer of lawn equipment, has preliminary drawings


for two grass trimmer designs. Charla Fraley’s job is to determine which is better
environmentally. Specifically, she is to use the following data to help the company
determine:
a) The revenue retrieval for the GF Deluxe
b) The revenue retrieval for the Premium Mate
c) Which model is the better design alternative based on revenue retrieval

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