Determine the best policy

Assignment Help Finance Basics
Reference no: EM13791153

The Brennan Aircraft Division of TLN Enterprises operates a large number of computerized plotting machines. For the most part, the plotting devices are used to create line drawings of complex wing airfoils and fuselage part dimensions. The engineers operating the automated plotters are called loft lines engineers. The computerized plotters consist of a minicomputer system connected to a 4- by 5-foot flat table with a series of ink pens suspended above it. When a sheet of clear plastic or paper is properly placed on the table, the computer directs a series of horizontal and vertical pen movements until the desired figure is drawn. The plotting machines are highly reliable, with the exception of the four sophisticated ink pens that are built in. The pens constantly clog and jam in a raised or lowered position. When this occurs, the plotter is unusable. Currently, Brennan Aircraft replaces each pen as it fails. The service manager has, however, proposed replacing all four pens every time one fails. This should cut down the frequency of plotter failures. At present, it takes one hour to replace one pen. All four pens could be replaced in two hours. The total cost of a plotter being unusable is $50 per hour. Each pen costs $8. If only one pen is replaced each time a clog or jam occurs, the following breakdown data are thought to be valid:

HOURS BETWEEN PLOTTER FAILURES

IF ONE PEN IS REPLACED

DURING A REPAIR PROBABILITY

10 ....................................0.05

20 ....................................0.15

30 ....................................0.15

40 ....................................0.20

50 ....................................0.20

60 ....................................0.15

70 ....................................0.10

Based on the service manager's estimates, if all four pens are replaced each time one pen fails, the probability distribution between failures is as follows:

HOURS BETWEEN PLOTTER FAILURES

IF ALL FOUR PENS ARE REPLACED

DURING A REPAIR PROBABILITY

100 ........................0.15

110 ........................0.25

120 ........................0.35

130 ........................0.20

140 ........................0.00

(a) Simulate Brennan Aircraft's problem and determine the best policy. Should the firm replace one pen or all four pens on a plotter each time a failure occurs?

(b) Develop a second approach to solving this problem, this time without simulation. Compare the results. How does it affect Brennan's policy decision using simulation?

Reference no: EM13791153

Questions Cloud

Describe the challenges you have had : Describe the challenges you have had and the benefits you have experienced with revising and polishing your written work.
Prepare an income statement and an owner equity : Prepare an income statement and an owner's equity statements for the 3 months ending in the August 31.
Transaction and related adjusting entry : For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects ( + for increase, ' for decrease, and NE for no effect) on the accounting equation
Identify your purpose clearly incorporate audience needs : Identify your purpose clearly, incorporate audience needs, establish a desired tone, and organize information/claims effectively.
Determine the best policy : Simulate Brennan Aircraft's problem and determine the best policy. Should the firm replace one pen or all four pens on a plotter each time a failure occurs?
Analyzing world cultures : Analyzing World Cultures
Contrast the management information systems : Compare and contrast the management information systems (MIS) in place in 2 distinctly different organizations. Compare each organization's use of information systems to help manage internal operations and to make decisions.
Wireless communication, internet and smart phone technology : Describe your perspective on communication technology such as wireless communication, the Internet, and smart phone technology.
Understand the multiplicity of currencies : Understand the multiplicity of currencies and the attendant problems related to nominal contracts. Differentiate the partial segmentation of capital markets producing potential differences in costs of capital across the world

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd