A Company That Makes the Rocket Widget Has One Machine

question 41

Multiple Choice

A company that makes the rocket widget has one machine capable of producing this unique item. The machine requires an attendant, who works 40 hours a week for $12 per hour and has made himself available for a maximum of 8 hours of overtime. It costs $20 per hour to run the machine and it is capable of producing 10,000 rocket widgets per hour. It is possible to outsource some production, as long as the total output is limited to less than ten percent of total output. The widgets sell for $10 per hundred and cost $1 per hundred in materials. If the production manager wishes to develop a sales and operations plans using an optimization model, which of the following statements is valid?

• A)A constraint should limit the cost of materials to less than or equal to $1.
• B)A constraint should be to limit outsourced output to less than 10% of total output.
• C)The objective function must be to produce at least 10,000 rocket widgets per hour.
• D)A constraint should limit the cost to run the machine to less than or equal to $20 per hour.

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Definitions:

Two-sided

Pertaining to hypothesis testing, where the alternative hypothesis is not directional and considers both possibilities of the effect being greater than or less than the null hypothesis.

Null Hypothesis

A statement in hypothesis testing that presumes no significant difference or effect, serving as the default until evidence suggests otherwise.

Population Parameter

A value that accurately represents a particular characteristic of an entire population.

Alternative Hypothesis

A statistical hypothesis that contradicts the null hypothesis, indicating the presence of an effect, difference, or relationship.