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Recall Example 5.6 discussed in Section 5.3.7. Determine the ranking of the suppliers using the following methods:

a. L1 norm to scale the criteria values and L1 metric to rank

b. L2 norm to scale the criteria values and L2 metric to rank

Do you find any rank reversals including the rankings obtained in Section 5.3.7? Explain any differences.

Consider a supplier selection problem where the five most important criteria are identified as follows.

C1—Risk

C2—Delivery time

C3—Quality

Recall Example 5.6 discussed in Section 5.3.7. Determine the ranking of the suppliers using the...

C4—Price

C5—Business Performance

a. Using the Borda method and your own preferences, rank the criteria and compute their weights.

b. Suppose 5% of purchasing managers were interviewed and they were asked to rank the above criteria. The summary of their responses are given in Table 5.41.

Determine the weights of the criteria and their rankings based on the sample survey of the purchasing managers, using the Borda method for multiple decision makers discussed in Section 5.3.8. How does their ranking compare with yours?

 
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Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers A, B, C and D. Your criteria for selection are price (min), company size in market capitalization in millions of dollars (max), and quality on a scale of 1 to 100 (max). The relevant data are given in Table 5.42.

a. Scale the data using the Ideal value method.

b. Use the L∞ metric method to rank the four suppliers.

Consider an order allocation problem under multiple sourcing, where it is required to buy 2000 units of a certain product from three different suppliers. The fixed setup cost (independent of the order

Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers...-1

Suppose you are planning to use single sourcing and have narrowed down the choices to four suppliers...-2

quantity), variable cost (unit price), and the maximum capacity of each supplier are given in Table 5.43 (two suppliers offer quantity discounts).

The objective is to minimize the total cost of purchasing (fixed plus variable cost). Formulate this as a linear integer programming problem. You must define all your variables clearly, write out the constraints to be satisfied with a brief explanation of each, and develop the objective function.

 
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A company needs two parts, A and B, for its product. It can either buy them from another company, or can make them in its own plant, or do both. The costs of each alternative and the in-house production rates are given in Table 5.40.

The company must have at least 100 units of part A and 200 units of part B each week. There are 40 hours of production time per week and idle time on the machine costs $3.00/hour. Furthermore, no more than 60 units of A can be made each week, and no more than 120 units of B can be made each week. Also, no more than 150 units of B can be bought per week. The company wants to determine an optimal plan that will minimize the total costs per week. Formulate this as a linear programming problem and solve. What is the optimal make or buy plan for the company?

 
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Demand is normally distributed with a mean of 500 and a standard deviation of 200. Newsvendor assumptions hold. The selling price per unit is $400, cost per unit is $200, and salvage per unit is $40. Determine the optimal order quantity. How would your answer change if the salvage value were $0?

Demands over time for two products (D1 and D2) are given in Table 5.45. Determine the correlation between them.

For Exercise 5.26 (c), what would the answer be if the correlation between the two horns is −0.6? What would it be if the correlation is 0? What would it be if the correlation is 0.4?

 
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