Nozzles

Management Problems

Instructions:-

Problem 4-1

Always Rain Irrigation, Inc., would like to determine capacity requirements for the next four years. Currently two production lines are in place for making bronze and plastic sprinklers. Three types of sprinklers are available in both bronze and plastic: 90-degree nozzle sprinklers, 180-degree nozzle sprinklers, and 360-degree nozzle sprinklers. Management has forecast demand for the next four years as follows:

 

	YEARLY DEMAND
	1 (IN 000s)		2 (IN 000s)		3 (IN 000s)		4 (IN 000s)
Plastic 90	34		41		54		56
Plastic 180	12		19		14		15
Plastic 360	49		54		64		69
Bronze 90	9		8		7		14
Bronze 180	3		3		9		12
Bronze 360	7		11		15		16

Both production lines can produce all the different types of nozzles. The bronze machines needed for the bronze sprinklers require three operators and can produce up to 15,000 sprinklers. The plastic injection molding machine needed for the plastic sprinklers requires five operators and can produce up to 235,000 sprinklers. Three bronze machines and only one injection molding machine are available.

What are the capacity requirements for the next four years? (Assume that there is no learning.) (Enter the demand values in thousands. Round your answers to 2 decimal places.)

	Year 1		Year 2		Year 3		Year 4
Plastic
Demand for plastic sprinklers
Percentage of capacity used		%		%		%		%
Machine requirements
Labor requirements
Bronze
Demand for bronze sprinklers
Percentage of capacity used		%		%		%		%
Machine requirements
Labor requirements

Problem 4-5

Expando, Inc., is considering the possibility of building an additional factory that would produce a new addition to their product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $5 million. If demand for new products is low, the company expects to receive $11 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $13 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $8 million. Were demand to be low, the company would expect $13 million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $15 million. In either case, the probability of demand being high is .30, and the probability of it being low is .70. Not constructing a new factory would result in no additional revenue being generated because the current factories cannot produce these new products.

a. Calculate the NPV for the following: (Leave no cells blank – be certain to enter “0” wherever required. Enter your answers in millions rounded to 1 decimal place.)

 

Plans	NPV
Small facility	$	million
Do nothing		million
Large facility		million

b. The best decision to help Expando is  to do nothing.

1. to do nothing.
2. to build the large facility.
3. to build the small facility.

Shouldice Hospital in Canada is widely known for one thing—hernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past two decades this small 90-bed hospital has averaged 7,000 operations annually. Last year, it had a record year and performed nearly 7,500 operations.
The below table shows the number of operations with 90 Beds (30 patients per day). Each row in the table follows the patients who checked in on a given day. The columns indicate the number of patients in the hospital on a given day.

Case 4-1

	BEDS REQUIRED
CHECK-IN DAY	MONDAY	TUESDAY	WEDNESDAY	THURSDAY	FRIDAY	SATURDAY	SUNDAY
Monday	30	30	30
Tuesday		30	30	30
Wednesday			30	30	30
Thursday				30	30	30
Friday
Saturday
Sunday	30	30					30
Total	60	90	90	90	60	30	30

For example, the first row of the table shows that 30 people checked in on Monday and were in the hospital for Monday, Tuesday, and Wednesday. By summing the columns of the table for Wednesday, we see that there are 90 patients staying in the hospital that day.
How well is the hospital currently utilizing its beds? (Round your answers to 1 decimal place.)

 

	Utilization
Monday	%
Tuesday	%
Wednesday	%
Thursday	%
Friday	%
Saturday	%
Sunday	%
Total	%

Problem 4-4

 

	YEARLY DEMAND
	1 (in 000s)		2 (in 000s)		3 (in 000s)		4 (in 000s)
Plastic 90	32		44		55		56
Plastic 180	15		16		17		18
Plastic 360	50		55		64		67
Bronze 90	11		15		18		23
Bronze 180	6		5		6		9
Bronze 360	15		16		17		20

Both production lines can produce all the different types of nozzles. The bronze machines needed for the bronze sprinklers require two operators and can produce up to 12,000 sprinklers. The plastic injection molding machine needed for the plastic sprinklers requires four operators and can produce up to 200,000 sprinklers. Three bronze machines and only one injection molding machine are available.

Suppose that operators have enough training to operate both the bronze machines and the injection molding machine for the plastic sprinklers. Currently AlwaysRain has 10 such employees. In anticipation of the above ad campaign, management approved the purchase of two additional bronze machines.

What are the labor requirement implications? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

 

	Year 1 (in 000s)	Year 2 (in 000s)	Year 3 (in 000s)	Year 4 (in 000s)
Labor requirements-bronze
Labor requirements-plastic
Total labor requirements