A Small Company Makes Three Different Types of Bird Houses

question 12

Multiple Choice

A small company makes three different types of bird houses. Each type requires the services of three different departments, as indicated by the following table. Type A Type B Type C Cutting department 0.2 hour 0.1 hour 0.3 hour Finishing department 0.5 hour 0.5 hour 0.4 hour Assembly department 0.1 hour 0.1 hour 0.3 hour The cutting, finishing, and assembly departments have available a maximum of 61, 128, and 52 work-hours per week, respectively. How many bird houses of each type should be made per week so that the company is operating at full capacity?

• A) 70 houses of type A, 60 houses of type B, and 100 houses of type C
• B) 90 houses of type A, 70 houses of type B, and 120 houses of type C
• C) 80 houses of type A, 60 houses of type B, and 100 houses of type C
• D) 90 houses of type A, 60 houses of type B, and 110 houses of type C

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Definitions:

Risk-Free Return

The theoretical return attributed to an investment with zero risk, often represented by the yield on government securities.

Jensen Measure

A risk-adjusted performance measure that calculates the average return on a portfolio or fund over and above that predicted by the Capital Asset Pricing Model (CAPM), given the portfolio's or fund's risk.

Market Portfolio

A theoretical bundle of investments that includes every asset in the market, weighted by market capitalization; often used as a benchmark in the capital asset pricing model (CAPM).

Risk-Free Return

The return on an investment with no loss of principal, often associated with government bonds.