Fall 2014 MGMT3306

Fall 2014MGMT 3306Operations and Supply Chain ManagementTest 3Answer All. Show detail work for full credit.1. Consider a case where the management is facing with 3 options to choose from. The payoffs andprobability associated with each of the scenario is also estimated and provided. Based on theinformation tabulated below, calculate the EVwPI (expected value with perfect information) andrecommend what should be the maximum amount that the management should pay for the perfectinformation that can help them to make the best decision. (30 points)0.5 for increase0.3 for equal20% decreaseOption 1$ 1,500$ 300$ -800Option 2900600-200Option 35005005002. A dietitian wants to design a breakfast menu for certain hospital patients. The menu is to include twoitems A and B. Suppose that each ounce of A provides 2 units of vitamin C and 2 units of iron and eachounce of B provides 1 unit of vitamin C and 2 units of iron. Suppose the cost of A is 4/ounce and thecost of B is 3/ounce. If the breakfast menu must provide at least 8 units of vitamin C and 10 units ofiron, how many ounces of each item should be provided in order to meet the iron and vitamin Crequirements for the least cost? What will this breakfast cost? (30 points)3. We use 2,750 per year of a certain subassembly that has a purchase cost of $450, and an annualholding cost of $500 per unit. Each order placed costs us $150. We operate 300 days per year and havefound that an order must be placed with our supplier 12 working days before we can expect to receivethat order. For this subassembly, find:(a) the economic order quantity,(b) the reorder point.(20 points)4. Why is ERP important for operations and overall organization?(20 points)