Spreadsheet Modeling & Decision Analysis, 5ed

Cliff T. Ragsdale
Check figures for selected odd problems.

Chapter 2
7.
9.
11.
13.
15.
17.
19.
21.
23.

Optimal objective value = 10.55

Optimal objective value = 125
Optimal objective value = 154
Optimal objective value = 775
Optimal objective value = 32500
Optimal objective value = 0.75
Optimal objective value = 59300
Optimal objective value = 26000
Optimal objective value = 3.5 million

3.
5.
7.
9.
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31.
33.
35.
37.
39.
41.
43.
45.
47.

Maximum profit = $775,000

Minimum cost per pound = $0.75
Maximum profit = $59,300
Maximum profit = $26,000
Minimal cost = $3.5 million
c. Maximum revenue = $444,000
c. Maximum new customers = 113,500
b. Maximum return = 10.25%
c. Maximum return = $8,898 (or 8.898%)
c. Minimum cost = $1,049 (in $1,000s)
c. Profit = $1,526,500
c. Minimum number of employees = 640
c. Maximum steam production = 32,174 pounds per ton
c. Minimum transportation cost = $730
c. Minimum cost = $44,067.67
c. Maximum profit = $1,007,750
c. Profit = $669,000
c. Maximum profit = $29,100
c. Minimum investment = $38,149
b. Total Finance Charge = $22,878.
Among other things, defer $3,000 in payments in March
b. Total Profit = $1,309,900
b. Branches 1, 2, 6 & 8 are efficient

3.
5.

c.
d.
a.
b.
6.

7.
9.

c.
b.

Chapter 3

Chapter 4
4.67
15.33.
0
The new objective would be unbounded.
d. No.
h. Every additional ton of concentrate unit shipped from Eustis to Miami would increase costs by $50.
$225
The profit per acre of cantaloupes would have to increase by $99.50.

11. a. No.
e. Yes.
13. c. Yes. Profits would increase by $71,000=$7,000.
15. b. This constraint is nonbinding and its RHS could by 0.15 without affecting the solution.
17. c. Regular octane rating = 90.0, supreme octane rating = 102.11.
19. b. Location 6.
21. b. Macon. Each additional unit of capacity there increases costs by $36.45 (which is the cheapest way to
increase capacity).
e. $1 extra.
23. c. $0.
25. b. $0.
27. f. There are alternate optimal solutions. One is given by X1 = 2, X2 = 5, S3 = 5.
29. b. i. S=4

Chapter 5
3.
7.
9.

11.
13.
15.
17.
19.
21.
23.
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27.
29.
31.
33.

a. Total cost = $3,398

The cost on each arc increases by $2,000.
c. 20,000 from Region 1 to Pine Hills, 10,000 from Region 1 to Eustis, 40,000 from Region 2 to Pine
Hills, 25,000 from Region 3 to Eustis, 35,000 from Region 4 to Sanford, 25,000 from Region 5 to Eustis,
5,000 from Region 5 to Sanford. Total cost $1,132,500.
c. Total Cost = $1,006,675
b. Minimum total cost of $67,825.
c. Total Profit = $12,750
b. Minimum total cost of $2,700.
c. Minimum total cost = $285
c. Total cost = $1,875
c. Total layover hours = 15, longest layover time = 7 hours.
c. Total cash required = $273,658
c. The maximum flow is 55 tons.
c. Total cost: $20,150.
c. Maximum flow = 5 sets of connecting flight plans.
Total cost = $270

Chapter 6
7.
9.
11.
13.
15.
17.
19.
21.
23.
25.
27.
29.
31.
33.

c.
c.
c.
c.
c.
c.
c.
c.
c.
c.
c.
c.
b.
a.

Total cost = $2,512

Minimum total cost = $1,475,000
Total cost = $42,300
Total NPV = $1,925,000
Maximum monthly rental income = $23,200
Minimum cost = $242,000
Total cost = $7,800,000.
Total cost = $63,900.
Maximum amount of money at the beginning of year 1 = $197,925
Minimum total cost = $715,000.
Profit = $545,444.
A total of 395,000 people can be reached within 4 minutes.
Total cost = $855,000
Total hubs = 8, Total coverage = 55.

5.
7.
9.
11.

d.
c.
c.
b.

None.
X1 = 8.57 and X2 = 0.857
Wythe = 3.33, Giles = 3.67, Maximum excess = 6.667
Minimum objective value = 2

Chapter 7

13.
15.
17.
19.
21.
23.
25.
27.
29.

b. Min cost = $0.865 per pound, Min Fat Content = 5%

b. Maximum Deviation = 13.53%
b. Sulfur 1100, Coal dust 1.7, Steam 32,174
b. Total Cost = $3470
b. Best possible value for objective 1 = 1965, Best possible value for objective 2 = 67.4%
c. Max Deviation = 1.97%
b. Optimal solution: S = 6 , A= 6
b. A = 18,055.70, B = -0.1266
The optimal solution is: X2A= X2B = X1C = X2D = X1E = 1, d=14

7.
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35.
37.

c. Profit = $2,648.78
c. Maximum profit = $1,668.8 (in $000s)
a. Minimize r . This is a linear objective.
Yield = 12.51%
c. Model 1 = 34, Model 2 = 14, Model 3 = 32
a. Day price = $0.1307, Night price = $0.0805
c. Maximum profit = $84.52
a. 399.22 miles of pipe would be needed.
b. The solution is: X=35, Y=57
b. Prob. of receiving all donations = 0.15396
b. Distance = 25.486
a. Variance=0.00088, Return=10.68%.
b. This generates $952 in expected earnings.
a. Max lateness = 30.
b. Tour length = 7,289.6
b. 97 out of 127 or 76%

Chapter 8

Chapter 9
7.
9.

c.
a.

R2=0.922.

13. d.
15. d.
17. c.
f.
19. b.
21. a.

The relation between mileage and price seems to be fairly linear while the relationship between model
year and price appears to be quadratic.
The R2 statistic indicates that approximately 96.6% of the total variation in the % of O-ring
expansion is accounted for by temperature.
R2 = 0.9837.
90.961
R2 = 0.0502.
R2 = 0.774.
Years of service. R2 = 0.737.
b0 = 6.030, b1 = 0.170

5.
7.
9.
11.

c.
b.
b.
b.

Overall classification accuracy is 26/30 or 86.7%.

Overall classification accuracy is 25/30 or 83.3%.
Overall accuracy = 66.67%
Overall accuracy = 94.44%

3.
5.

b.
c.

Forecast for September = 38.5 + 0.25(32 - 38.5) =36.875

11. c.

Chapter 10

Chapter 11
Forecasts
21
22

2-Period
542.0
547.0

4-Period
533.8
536.4

7.

45.
47.
49.
51.
53.
55.
57.

Forecast for year 21 = 553.56 + 113.21 = 566.77

Forecast for year 22 = 553.56 + 213.21 = 579.98
c. Forecast for year 21 = 552 + 111.42 = 563.42
Forecast for year 22 = 552 + 211.42 = 574.84
Nonstationary.
Forecast for year 15 = 172250 + 28500 = 189250
b. Forecast for year 14 = 185266 + 18699 = 193965
Forecast for year 15 = 185266 + 28699 = 202665
b. Approximately 54.8% of the total variation in the number of units sold is being accounted for by this
e.
Seasonal Index
1
84.2%
2
92.3%
3
126.8%
4
96.8%
c. Forecast for quarter 1 of 2006 = 41.9-4.37 = 37.5
Forecast for quarter 2 of 2006 = 41.9+0.56 = 42.5
Forecast for quarter 3 of 2006 = 41.9+11.23 = 53.1
Forecast for quarter 4 of 2006 = 41.9+1.10 = 43.0
a. = 0.114, = 1.0
a. = 0.330, = 0.280, = 0.533
The data appear to be non-stationary.
a. w1 = 0.789, w2 = 0.015, w3 = 0.091, w4 = 0.105
a. = 0.678, = 0.
b. The adjusted-R2 for this model is 45.9%. This is lower than the adjusted-R2 for the linear trend
model, suggesting that the quadratic term is unnecessary.
a. = 0.179, =0.3569, =0.5
Nonstationary.
a. = 0.6517, =0.091
Nonstationary.
a. MSE = 0.0315
a. MSE = 0.06758
b.
Period
Month
Forecast
83
11
6.36
84
12
6.36
a. MSE = 21757.5
a. MSE = 21757.5
The data appear to be fairly stationary.
a. MSE = 0.05434
a. MSE = 0.5434
a. MSE = 997.967
a. MSE = 912.868

3.
5.
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b.
b.
a.
b.
b.
a.
c.
b.

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b.

Chapter 12
Approximately $3,200,000
About 67% of the time
Mean = 900, Std Dev = 11.19, P(<920) = 0.9641
min $4,390, max $8,190
Expected profit $3,267
Average $20,819,912
Probability of investment being worth more than $1,000,000 0.11
Expected NPV $2.0 million

19. See file: Prb12_19.xls

a. Average total cost $399,827
21. a. About $9.15.
23. d. -$144,540
25. d. Probability of total weekly claims exceeding $20,000 0.15
27. b. Probability of selling at least 10 cars 0.29
29. b. 8 employees should be scheduled.
31. c. About $7.12

33. a.
35. b.

$23,051
Approximately 0.845

Chapter 13
5.
7.
9.
11.
13.
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23.

c. 30 minutes
a. Expected service time = 1/40 = 0.025 hours (or 1.5 minutes)
With 3 servers the average waiting time is 0.3057 hours or 18.34 minutes.
b. Arrival rate = 1/2 per minute
b. w-wq = 0.1002-0.0585=0.0417 hours or 2.502 minutes
a. 50/4=12.5 arrivals per minute per chute
c. 0.0408 hours or approximately 2.45 minutes
a. 14 (arrival rate) 0.1393 (prob of balk) $55 (profit margin) = $107.26 per hour
a. 0.0486
a. 45.3%

5.
7.
9.
11.
13.
15.

d. 18 time periods
c. Critical Path: ABDGH
Total Crash Cost $246
c. 26 weeks
c. 27 days
c. Expected Time = 10.17
Expected Variance = 0.50
c. 39 days.
b. ~ 43 days
a. 49 days, $34,500
b. 61.9 days
d. Average finish time: 352.54 days

Chapter 14

17.
19.
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25.

Chapter 15
5.
7.
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g.
e.
g.
a
c.
b.
b.
f.
c.
b.
b.

.005*30,000 = $150
Order 15
$2.59
Large development
Medium development
Building a small development provides the greatest expected utility.
This decision rule results in a tie.
Buy now.
$5.3603.
Option 2 should be selected
Bid $7 million, EMV = $7.98 million

21.
23.
25.
29.
31.

P(HD | Pos EKG)=0.667.

b. 0.600
P(Credit Denied | Bad Credit Risk) = 0.165/0.2 = 0.825.
c. Sedan 2 has the highest weighted score
c. Select model Y