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Tik Ed McMaster is selling tickets to a balloon ride. The ride takes place at dawn on Sunday because the winds are most calm at that time of day. Demand for the ride is equally likely to be 1, 2, 3, 4, or 5 units. Tik buys the tickets for $10 each and resells them for $20 each. Unsold tickets have no value, and he can only place one order for this week. How many tickets should Tik buy to ensure that there are no lost sales – and why is it not optimal for him to buy this number? 

When considering inventory management, a “batch” refers to:

Assume you have a 3-step process using 3 machines with deterministic activity times of 15 min, 20 min, and 15 min respectively and it costs $10 to add a machine at any step. How much can you increase capacity if you invest $30 = ($10*3) to add machines?

A process contains 2 steps. The duration of Activity A is 10 minutes and it uses Resource X. The duration of Activity B is 5 minutes and it uses Resource Y. What happens to capacity if I make an investment to reduce the activity time for Step B to 2 minutes but Activity A now takes 12 minutes?  

The Harbor-East Star, a daily local newspaper, used the newsvendor model to determine their production quantity to be 1500 papers. Following the recession, the editor observed that the average demand stayed the same but the variability (standard deviation) of demand has decreased. How should the production quantity be changed if demand is normally distributed?

The Hopkins bookstore has decided to stock Lacrosse-playing Blue Jays as part of its souvenir offerings. This particular sub-species of Blue Jays does not get along well with other birds so the storage cost is 10% of the purchase price times the square of the average number of birds in the store. Demand for these birds is stable at 10 units per week, the store is open for 50 weeks per year, the ordering cost S = $10, and all lead times are negligible. [Hint: assume p = $10, and that the total of the annual holding cost, ordering cost, and purchase cost is  .] Since the retailer cannot order partial birds, he decides to round the EOQ down to the nearest integer. How many birds should he order?

When considering what is transformed in a process, an input is:

In a system with four distinct production steps, the manager decided to double the capacity of the system by adding another machine at one of the steps. As a result the capacity of the system increased but it did not double. Which of the following statements present the most reasonable explanation(s)?

A call center has a total of 5 telephone lines coming into its customer service department, which is staffed by 2 customer service representatives. Therefore up to 3 callers can be on hold at one time. If a customer calls when all of the lines are in use they get a busy signal. On average, 1.5 potential customers call every minute. Each customer service representative requires (on average) 1 minute to serve a caller. After great deliberation, management has decided to add another line, increasing the total to 6. What happens to the proportion of callers who get a busy signal?

A new grocery store, Whole Paycheck for Foods, recently reconfigured their express checkout lines. While the previous setup had a separate line for each of six checkout counters, the new configuration has a common line leading up to 6 checkout counters. Identify the true statement(s) in the list below: