One of the elements in the flooding of NewOrleans during

Think back to your first hour after awakening thismorning. List 15 decision-making opportunities thatexisted during that hour. After you have done that,mark the decision-making opportunities that youactually recognizedthis morning and uponwhich youmade a conscious decision.

Someof the following problems wouldbe suitable forsolution by engineering economic analysis. Whichones are they?(a)Would it be better to buy a car with a dieselengine or a gasoline engine?(b)Should an automatic machine be purchased toreplace three workers now doing a task by hand?(c)Would it be wise to enroll for an early morningclass to avoid traveling during the morning trafficrush hours?(d)Would you be better off if you changed yourmajor?(e)One of the people you might marry has a job thatpays very little money, while another has a pro-fessional job with an excellent salary. Which oneshould you marry?

Which one of the following problems ismostsuitablefor analysis by engineering economic analysis?(a)Some 75?c candy bars are on sale for 12 bars for$6. Sandy, who eats a couple of candy bars aweek, must decide whether to buy a dozen at thelower price.(b)A woman has $150,000 in a bank checkingaccount that pays no interest. She can eitherinvest it immediately at a desirable interest rateor wait a week and know that she will be able toobtain an interest rate that is 0.15% higher.(c)Joe backed his car into a tree, damaging thefender. He has car insurance that will pay forthe fender repair. But if he files a claim for pay-ment, they may give him a lower good driverrating and charge him more for car insurance inthe future.

If you have $300 and could make the right decisions,how long would it take you to become a millionaire?Explain briefly what you would do.

Many people write books explaining how to makemoney in the stock market. Apparently the authorsplan to maketheirmoney sellingbooks telling otherpeople how to profit from the stock market. Whydont these authors forget about the books and maketheir money in the stock market?

The owner of a small machine shop has just lost oneof his larger customers. The solution to his prob- lem, he says, is to fire three machinists to balancehis workforce with his current level of business. Theowner says it is a simple problem with a simplesolution. The three machinists disagree. Why?

Every college student had the problem of selectingthe college or university to attend. Was this a simple,intermediate, or complex problem for you? Explain.

Toward the end of the twentieth century, the U.S. gov-ernment wanted to save money by closing a smallportion of its domestic military installations. Whilemany people agreed that saving money was a desir-able goal, people in areas potentially affected bya closing soon reacted negatively. Congress finallyselected a panel whose task was to develop a list ofinstallations to close, with the legislation specifyingthat Congress could not alter the list. Since the goalwas to save money, why was this problem so hard tosolve?

The college bookstore has put pads of engineeringcomputation paper on sale at half price. What is theminimum and maximum number of pads you mightbuy during the sale? Explain

Consider the seven situations described. Which onesituation seems most suitable for solution by engi-neering economic analysis?(a)Jane has met two college students that interesther. Bill is a music major who is lots of fun tobe with. Alex is a fellow engineering student, buthe does not like to dance. Jane wonders what todo.(b)You drive periodically to the post office to pickup your mail. The parking meters require 25?cfor6 minutesabout twice the time required to getfrom your car to the post office and back. If park-ing fines cost $20, do you put money in the meteror not?(c)At the local market, candy bars are 75?c each orthree for $2. Shouldyou buy themthree at a time?(d)The cost of car insurance varies widely fromcompany to company. Should you check withseveral insurance companies when your policycomes up for renewal?(e)There is a special local sales tax (sin tax) ona variety of things that the town council wouldlike to remove from local distribution. As a result,a store has opened up just outside the town andoffers an abundance of these specific items atprices about 30% less than is charged in town.Should you shop there? f)Your mother reminds you that she wantsyou to attend the annual family picnic. Thatsame Saturday you already have a date witha person you have been trying to date formonths.(g)One of your professors mentioned that you havea poor attendancerecord in her class.You wonderwhetherto drop the coursenow orwait to seehowyou do on the first midterm exam. Unfortunately,the course is required for graduation.

A car manufacturer is considering locating an assem-bly plant in your region. List two simple, two inter-mediate, and two complex problems associated withthis proposal

Consider the following situations. Which onesappear to represent rational decision making?Explain.(a)Joes best friend has decided to become a civilengineer, so Joe has decided that he will alsobecome a civil engineer.(b)Jill needs to get to the university from her home.She bought a car and now drives to the univer-sity each day. When Jim asks her why she didntbuy a bicycle instead, she replies, Gee, I neverthought of that.(c)Don needed a wrench to replace the spark plugsin his car. He went to the local automobile sup-ply store and bought the cheapest one they had.It broke before he had finished replacing all thespark plugs in his car.

Identify possible objectives for NASA. For yourfavorite of these, how should alternative plans toachieve the objective be evaluated?

Suppose you have just 2 hours to determine howmany people in your hometown would be interestedin buying a pair of left-handed scissors. Give a step-by-step outline of how you would seek to find outwithin the time allotted.

A college student determines that he will have only$250 per month available for his housing for thecoming year. He is determined to continue in theuniversity, so he has decided to list all feasible alter-natives for his housing. To help him, list five feasiblealternatives.

Describe a situation in which a poor alternative wasselected because there was a poor search for betteralternatives

If there are only two alternatives available andboth are unpleasant and undesirable, what shouldyou do?

The three economic criteria for choosing the bestalternative are maximize the difference between out- put and input, minimize input, and maximize output.For each of the following situations, what is thecorrect economic criterion?(a)A manufacturer of plastic drafting triangles cansell all the triangles he can produce at a fixedprice. As he increases production, his unit costsincrease as a result of overtime pay and so forth.The manufacturers criterion should be.(b)An architectural and engineering firm has beenawarded the contract to design a wharf fora petroleum company for a fixed sum ofmoney. The engineering firms criterion shouldbe.(c)A book publisher is about to set the list price(retail price) on a textbook. The choice of a lowlist price would mean less advertising than wouldbe used for a higher list price. The amount ofadvertising will affect the number of copies sold.The publishers criterion should be.(d)At an auction of antiques,a bidderfor a particularporcelain statue would be trying to

As in Problem 1-18, state the correct economic crite-rion for each of the following situations.(a)The engineering school raffled off a car; ticketssold for $2 each or three for $5. When the stu-dents were selling tickets, they noted that manypeople had trouble deciding whether to buy oneor three tickets. This indicates the buyers crite-rion was.(b)A student organization bought a soft-drinkmachine for use in a student area. There wasconsiderablediscussionover whetherthey shouldset the machine to charge 75?c, $1, or $1.25 perdrink. The organization recognized that the num-ber of soft drinks sold would depend on the pricecharged. Eventually the decision was made tocharge $1. The criterion was.(c)In many cities, grocery stores find that their salesare much greater on days when they advertisespecial bargains. However, the advertised specialprices do not appear to increase the total physicalvolume of groceries sold by a store. This leadsus to conclude that many shoppers criterionis.(d)A recently graduated engineer has decided toreturn to school in the evenings to obtain a mas-ters degree. He feels it should be accomplishedin a manner that will allow him the maximum amount of time for his regular day job plustime for recreation. In working for the degree,he will.

Seven criteria are given in the chapter for judg-ing which is the best alternative. After reviewingthe list, devise three additional criteria that mightbe used.

Suppose you are assigned the task of determiningthe route of a new highway through an older sectionof town. The highway will require that many olderhomes be either relocated or torn down.Two possiblecriteria that might be used in deciding exactly whereto locate the highway are:(a)Ensure that there are benefits to those who gainfrom the decision and that no one is harmed bythe decision.(b)Ensure that the benefits to those who gain fromthe decision are greater than the losses of thosewho are harmed by the decision.Which criterion will you select to use in determiningthe route of the highway? Explain

For the project in Problem 1-21, identify the majorcosts and benefits. Which are market consequences,which are extra-market consequences,and which areintangible consequences?

You must fly to another city for a Friday meeting.If you stay until Sunday morning your ticket willbe $200, rather than $800. Hotel costs are $100per night. Compare the economics with reasonableassumptionsfor meal expenses.What intangible con-sequences may dominate the decision?

In the fall, Jay Thompson decided to live in a uni-versity dormitory. He signed a dorm contract underwhich he was obligated to pay the room rent forthe full college year. One clause stated that if hemoved out during the year, he could sell his dormcontract to another student who would move into thedormitory as his replacement. The dorm cost was$5000 for the two semesters, which Jay had alreadypaid.A month after he moved into the dorm, hedecided he would prefer to live in an apartment.That week, after some searching for a replacementto fulfill his dorm contract, Jay had two offers.One student offered to move in immediately andto pay Jay $300 per month for the eight remainingmonths of the school year. A second student offeredto move in the second semester and pay $2500to Jay.

Jay estimates his food cost per month is $500if he lives in the dorm and $450 if he lives in anapartment with three other students. His share ofthe apartment rent and utilities will be$400 permonth. Assume each semester is 41/2months long.Disregard the small differences in the timing of thedisbursements or receipts.(a)What are the three alternatives available to Jay?(b)Evaluate the cost for each of the alternatives.(c)What do you recommend that Jay do?

In decision making we talk about the construction ofa model. What kind of model is meant?

An electric motor on a conveyor burned out. Theforeman told the plant manager that the motor hadto be replaced. The foreman said that there were noalternatives and asked for authorization to order thereplacement. In this situation, is any decision makingtaking place? If so, who is making the decision(s)?

Bill Joness parents insisted that Bill buy himself anew sport shirt. Bills father gave specific instruc- tions, saying the shirt must be in good taste, that is,neither too wildly colored nor too extreme in tailor- ing. Bill found three types of sport shirts in the localdepartment store:Rather somber shirts that Bills father wouldwant him to buyGood-looking shirts that appealed to BillWeird shirts that were even too much for BillHe wanted a good-looking shirt but wonderedhow to convincehis father to let him keep it. The clerksuggested that Bill take home two shirts for his fatherto see and return the one he did not like. Bill selecteda good-looking blue shirt he liked, and also a weirdlavender shirt. His father took one look and insistedthat Bill keep the blue shirt and return the laven-der one. Bill did as his father instructed. What wasthe key decision in this decision process, and whomade it?

A farmer must decide what combination of seed,water, fertilizer, and pest control will be most prof- itable for the coming year. The local agriculturalcollege did a study of this farmers situation andprepared the following table. The last page of the colleges study was torn off,and hence the farmer is not sure which plan the agri-cultural college recommends. Which plan should thefarmer adopt? Explain

Identify the alternatives, outcomes, criteria, and pro-cess for the selection of your college major. Did youmake the best choice for you?

Describe a major problem you must address in thenext two years. Use the techniques of this chapter tostructure the problem and recommend a decision.

Apply the steps of the decision-making process toyour situation as you decide what to do after grad- uation

One strategy for solving a complex problem is tobreak it into a group of less complex problems andthen find solutions to the smaller problems. The resultis the solution of the complex problem. Give anexample in which this strategy will work. Then giveanother example in which this strategy will not work

When you make professional decisions involvinginvestmentsin engineeringprojects, whatcriteria willyou use?Contributed by D. P. Loucks, Cornell Universit

What are ethics?

Analyze the ethical aspects of Problem 1-6

Suppose you are a engineer working in a privateengineering firm and you are asked to sign docu- ments verifying information that you believe is nottrue. You like your work and your colleagues in thefirm, and your family dependson your income. Whatcriteria can you use to guide your decision regardingthis issue?

Find the ethics code for the professional society ofyour major.(a)Summarize its key points.(b)What are its similarities and differences incomparison to NSPEs ethics code?

Use a personal example or a published source toanalyze what went wrong or right with respect toethics at the assigned stage(s) of the decision-makingprocess.(a)Recognize problem.(b)Define the goal or objective.(c)Assemble relevant data.(d)Identify feasible alternatives (e)Select the criterion for determining the best alter-native.(f)Construct a model.(g)Predict each alternatives outcomes or conse-quences.(h)Choose the best alternative.(i)Audit the result.

One of the important responsibilities of municipalassembliesand schoolboards is public infrastructure,such as roads and schools. Especially for this respon-sibility, engineers bring skills, knowledge, and per-spectives that can improve public decision making.Often the public role is a part- time one, engineers thatfulfill it will also have full-time jobs as employees orowners of engineering firms.(a)What are some of the ethical issues that can arisefrom conflicts between the public- and private-sector roles?(b)What guidelines for process or outcomes arethere in your hometown?(c)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine

Increasing population and congestion often areaddressedthrough road improvement projects. Thesemay pit the interests of homeowners and businessowners in the project area against the interests ofpeople traveling through the improvement project.(a)What are someof the ethicalissuesthat canarise?(b)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes exist tohelp address the ethical issues of your example?

Economic development and redevelopment oftenrequire significant acreage that is assembled byacquiring smaller parcels. Sometimes this is donethrough simple purchase, but the property of anunwilling seller can be acquired through the pro-cess of eminent domain.(a)What are someof the ethicalissuesthat canarise?(b)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes existto help address the ethical issues in your city orstate?

State governments use a variety of advisory and regu-latory bodies. Example responsibilities include over-sight of professional engineering licensing and thepricing and operation of regulated utilities. Engineersbring skills, knowledge,and perspectives that are use-ful in this context. Often the public role is a part-timeone, and engineers that fulfill it will also have full-time jobs as employees or owners of engineeringfirms.(a)What are some of the ethical issues that can arisefrom conflicts between the public- and private-sector roles?(b)What guidelines for process or outcomes arethere in your home state?(c)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine.

Many engineerswork in state governments,and someare in high-profile roles as legislators, departmentcommissioners, and so on. Many of these individu-als move between working in the private and publicsectors.(a)What are some of the ethical issues that can ariseas individuals shift between public and privatesector roles?(b)What guidelines for process or outcomes arethere in your home state?(c)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine

In the U.S., regulation of paymentfor overtime hoursis done at the state and federal levels. Because mostengineering work is accomplished through projects,it is common for engineers to be asked or requiredto work overtime as projects near deadlines. Some-times the overtime is paid at time and a half, some-times as straight time, and sometimes the engineerssalary is treated as a constant even when overtimeoccurs. In a particular firm, engineeringinterns, engi-neers, and partners may be treated the same ordifferently.(a)What are some of the legal and ethical issues thatcan arise?(b)What is the law or regulation in your state orhome state?(c)Summarize and analyze an example firmspolicies or data on how common theproblem is.

At the federal government level, the economic con-sequences of decisions can be very large. Firms hirelobbyists, legislators may focus on their constituents,and advocacy organizations promote their own agen-das. In addition, sometimes some of the players arewilling to be unethical.(a)What are some of the ethical issues that canarise?(b)Summarize and analyze an example situationfrom the local newspaper,your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes arethere for the agency or legislative body involvedin your example?

At both state and federal levels, legislators canbe involved in pork barrel funding of capitalprojects. These projects may even bypass the eco-nomic evaluation using engineering economy thatnormal projects are subject to.(a)What are some of the ethical issues that canarise?(b)Summarize and analyze an example situationfrom the local newspaper,your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes arethere for the agency or legislative body involvedin your example?

At the international level, a common ethics issueimportant to engineering and project justificationis that of environmental regulation. Often differ-ent nations have different environmental standards,and a project or product might be built in eitherlocation.(a)Whatare some ofthe ethicalissuesthatcan arise?(b)Summarize and analyze an example situationfrom the local newspaper,your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes existto help address the ethical issues of yourexample?

At the international level, a common ethics issueimportant to engineering and project justification isthat of worker health and safety. Often differentnations have different standards, and a project orproduct could be built in either location.(a)What are some of the ethical issues that canarise? b)Summarize and analyze an example situationfrom the local newspaper, your hometown news- paper, or a news magazine.(c)What guidelines for process or outcomes existto help address the ethical issues of yourexample?

At the international level, engineering decisions arecritical in matters of sustainable development, acommon ethics issue.(a)What are some of the ethical issues that canarise?(b)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes existto help address the ethical issues of yourexample?

At the international level, questions arise aboutwhether the U.S. ban on bribery is practical orappropriate. In some countries government work-ers are very poorly paid, and they can support theirfamilies only byaccepting money to grease aprocess.(a)What are some of the ethical issues that canarise?(b)Summarize and analyze an example situationfrom the local newspaper, your hometown news-paper, or a news magazine.(c)What guidelines for process or outcomes existto help address the ethical issues of yourexample?

In the 1970s the Ford Motor Company sold its sub-compact Pinto model with known design defects.In particular, the gas tanks design and location ledto rupture, leaks, and explosion in low-speed, rear- impact collisions. Fifty-nine people burned to deathin Pinto accidents. In a costbenefit analysis weigh- ing the cost of fixing the defects ($11 per vehicle)versus the firms potential liability for lawsuits onbehalf of accident victims, Ford had placed the valueof a human life at $200,000. Ford eventually recalled1.4 million Pintos to fix the gas tank problem for acost of $30 million to $40 million. In addition theautomaker ultimately paid out millions more inliability settlements and incurred substantial damageto its reputation.(a)Critique Fords actions from the perspective ofthe NSPE Code of Ethics. b)One well-known ethical theory, utilitarianism,suggests that an act is ethically justified if itresults in the greatest good for the greatestnumber when all relevant stakeholders are con-sidered. Did Fords costbenefit analysis validlyapply this theory?(c)What should engineers do when the product theyare designing has a known safety defect with aninexpensive remedy?

The decision-making process used to launch theChallenger shuttle has been extensively analyzed.Briefly summarize the key institutional groups, howthe decision was made, and the ethical principles thatmay have been compromised.

One of the elements in the flooding of NewOrleans during Hurricane Katrina was the failureof some of the levees that protected the city. Out-line the role that ethical failures by engineers mayhave played in this situation. How could soci-ety structure decision making to minimize suchfailures?

Toyota has a long history of engineering-driven,high-quality production processes. However, morerecently a series of problems with accelerationand braking has raised questions about quality andethics. Summarize what seems to have producedthe problems, how they have been addressed, andhow successful Toyota has been in restoring itsreputation.

If you rent a car, you can (1) return it with a fullgas tank, (2) return it without filling it and pay$3.45/gallon, or (3) accept a fixed price of $35 forgas. The local price is $3.15/gallon for gasoline, andyou expectthis car to get 28 miles per gallon. The carhas a 20-gallon tank. What choice should you makeif you expect to drive:(a)150 miles?(b)350 miles?(c)500 miles?(d)How do your answers change if stopping at thefilling station takes 15 minutes andyour time isworth $12/hr?

Your car gets 24 miles per gallon (mpg) at 60 milesper hour (mph) and 20 mpg at 70 mph. At what speedshould you make a 500-mile trip:(a)If gas costs $3 per gallon and your time is worth$18/hr?(b)If gas costs $4 per gallon and your time is worth$12/hr?(c)If gas costs $5 per gallon and your time is worth$9/hr?(d)Build a spreadsheet (see Appendix A) to calcu-late the total trip cost for gas costs of $2, $3, $4,and $5 and values of time of $6, $9, $12,$15, and$18 per hour. Do two tables: one at 60 mph andone at 70 mph.

Willie Lohmann travels from city to city in the con-duct of his business. Every other year he buys aused car for about $15,000. The dealer allows about$8000 as a trade-in allowance, with the result that thesalesman spends $7000 every other year for a car.Willie keepsaccurate records, which show that allother expenses on his car amount to 32.3?c per milefor each mile he drives. Willies employer has twoplans by which salesmen are reimbursed for their carexpenses:A.Willie will receive all his operating expenses,andin addition will receive $3500 each year for thedecline in value of the automobile.B.Willie will receive 52?c per mile but no operatingexpenses and no depreciation allowance.If Willie travels 18,000 miles per year, whichmethod of computation gives him the larger reim-bursement? At what annualmileage do the two meth-ods give the same reimbursement?

Maria, a college student, is getting ready for threefinal examinations at the end of the school year.Between now and the start of exams,she has 15 hoursof study time available. She would like to get as higha grade average as possible in her math, physics,and engineering economy classes.She feels she muststudy at least 2 hours for each course and, if neces-sary, will settle for the low grade that the limited studywould yield. If Maria estimates her grade in eachsub-ject as follows, how much time should she devote toeach class?

Two manufacturing companies, located in cities90 miles apart, have discovered that they both sendtheir trucks four times a week to the other city full ofcargo and return empty. Each companypays its driver$185 a day (the round trip takes all day) and havetruck operating costs (excluding the driver) of 60?camile. Howmuch could eachcompanysave eachweekif they shared the task, with each sending its trucktwice a week and hauling the other companys cargoon the return trip?

A city needs to increase its rubbish disposal facili-ties. There is a choice of two rubbish disposal areas,as follows.Area A:A gravel pit with a capacity of 16 mil-lion cubic meters. Owing to the possibility of highgroundwater, however, the Regional Water PollutionControl Board has restricted the lower 2 million cubicmeters of fill to inert material only (earth, concrete,asphalt, paving, brick, etc.). The inert material, prin-cipally clean earth, must be purchased and hauled tothis area for the bottom fill.Area B:Capacity is 14 million cubic meters. Theentire capacity may be used for general rubbish dis-posal. This area will require an average increase ina round-trip haul of 5 miles for 60% of the city, adecreased haul of 2 miles for 20% of the city. Forthe remaining 20% of the city, the haul is the samedistance as for AreaA.Assume the following conditions:Cost of inert material placed in AreaAwill be$9.40/m3.Average speed of trucks from last pickup todisposal site is 15 miles per hour.The rubbish truck and a two-man crew will cost$140 per hour. Truck capacity of 41/2tons per load or 20 m3.Sufficient cover material is available at allareas;however,inert material for the bottom fillin AreaAmust be hauled in.Which of the sites do you recommend?(Answer:AreaB)

An oil company is considering adding an additionalgrade of fuel at its service stations. To do this, anadditional 3000-gallon tank must be buried at eachstation. Discussions with tank fabricators indicatethat the least expensive tank would be cylindricalwith minimum surface area. What size tank shouldbe ordered?(Answer:8-ft diameter by 8-ft length

The vegetable buyer for a group of grocery storeshas decided to sell packages of sprouted grain in thevegetable section of the stores. The product is per-ishable, and any remaining unsold after one week inthe store is discarded. The supplier will deliver thepackages to the stores, arrange them in the displayspace, and remove and dispose of any old packages.The price the supplier will charge the stores dependson the size of the total weekly order for all thestores.The vegetable buyer estimates the quantity thatcan be sold per week, at various selling prices, asfollows: The sprouted grain will be sold at the same pricein all the grocery stores.(a)How many packages should be purchased perweek, and at which of the five prices listed aboveshould they be sold?(b)Build a spreadsheet (see Appendix A) to calcu-late the profit for every combination of sellingprice and weekly order size

Cathy Gwynn,a recently graduatedengineer,decidedto invest some of her money in a Quick Shop gro- cery store. The store emphasizes quick service, alimited assortment of grocery items, and rather highprices. Cathy wants to study the business to see if thestore hours (currently 0600 to 0100) can be changedto make the store more profitable. Cathy assembledthe following information. The cost of the groceries sold averages 70% ofsales. The incremental cost to keep the store open,including the clerks wage and other incrementaloperating costs, is $20 per hour. To maximize profit,when should the store be opened, and when should itbe closed?

Jim Jones, a motel owner, noticed that just down thestreet the Motel 36 advertises a $36-per-night roomrental rate on its sign. As a result, this competitor hasrented all 80 rooms every day by late afternoon. Jim,on the other hand, does not advertise his rate,which is $54 per night, and he averagesonly a 68%occupancyof his 50 rooms.There are a lot of other motels nearby, but onlyMotel 36 advertises its rate on its sign. (Rates at theother motels vary from $48 to $80 per night.) Jimestimates that his actual incremental cost per nightfor each room rented, rather than remaining vacant,is $12. This $12 pays for all the cleaning, launder-ing, maintenance, utilities, and so on. Jim believeshis eight alternatives are: What should Jim do? Show how you reachedyour conclusion

A firm is planning to manufacture a new product.The sales department estimates that the quantity thatcan be sold depends on the selling price. As the sell-ing price is increased, the quantity that can be solddecreases. Numerically they estimate:P=$35.000.02QwhereP=selling price per unitQ=quantity sold per yearOn the other hand, management estimates thatthe average cost of manufacturing and selling the product will decrease as the quantity sold increases.They estimateC=$4.00Q+$8000whereC=cost to produce and sellQper yearThe firms management wishes to produce andsell the product at the rate that will maximize profit,that is, income minus cost will be a maximum. Whatquantity should the decision makers plan to produceand sell each year?

A manufacturing firm has received a contract toassemble 1000 units of test equipment in the nextyear. The firm mustdecide how to organize its assem-bly operation. Skilled workers, at $33 perhour each,could be assigned to individually assemble the testequipment. Each worker would do all the assem-bly steps, and it would take 2.6 hours to completeone unit. An alternate approach would be to set upteams of four less skilled workers (at $19 perhoureach) and organize the assembly tasks so that eachworker does part of the assembly. The four-manteam would be able to assemble a unit in one hour.Which approach would result in more economicalassembly?

A grower estimates that if he picks his apple cropnow, he will obtain 1000 boxes of apples, whichhe can sell at $3 per box. However, he thinkshis crop will increase by 120 boxes of apples foreach week he delays picking, but that the pricewill drop at a rate of 15?c per box per week;in addition, he estimates that approximately 20boxes per week will spoil for each week he delayspicking.(a)Whenshould he pick his crop to obtain the largesttotal cash return? How much will he receive forhis crop at that time?(b)Build a spreadsheet (see Appendix A) to calcu- latetheprofitfor0,1,2,...,6weeks.

On her first engineering job, Joy Hayes was given theresponsibility of determining the production rate for Problems33a new product. She has assembled the data presentedin the following graphs.(a)Select an appropriate economic criterionand estimate the production rate basedupon it.(b)Joys boss told Joy: I want you to maximizeoutput with minimum input. Joy wonders ifit is possible to meet her bosss criterion. Sheasks for your advice. What would you tellher?