ENGG450: Systems Design and Engineering - Engineering Assignment

Internal Code: MAS3148

Engineering Assignment:

Q1. A speciality software development firm is planning to offer one of four new software products and wishes to maximize profit, minimize risk, and increase market share. If a weight of 65% is assigned to profit potential, 20% to profitability risk, and 15% to market share, identify the product that would be best for the firm to introduce. Q2. The following payoff matrix indicates the expected profits associated with three decision options and three states of nature Q3. An item of energy-efficient equipment can be installed for $20,000, and which is expected to have a salvage value of $5,000 after 20 years, is expected to save $8,000 in energy costs per year. i) What is the rate of return if the equipment is in operation for 20 years? ii) For what lifetime will the equipment give a return of 10% Q4. A manufacturing plant has the capacity to assemble 500,000 units per year. At present, it is operating at 75% of capacity. The annual income is $500,000. The annual fixed cost is $150,000 and the variable cost $0.40 per unit assembled. i) What is the annual profit or loss of the centre? ii) At what volume of output does the centre break even? iii) What will be the profit or loss at 70%, 80% and Q5. A used automobile can be purchased by a student to provide transportation to and from the university for $10,000 as-is (i.e. without warranty). First-year maintenance cost is expected to be $400 and the maintenance costs will increase by $100 per year thereafter. Operation costs for the automobile will be $2,000 for every year the automobile is used and its salvage value decreases by 15% per year. i) What is the economic life of the vehicle without considering the varying value of money over time? ii) What is the economic life of the vehicle if the rate of interest is 5%? Q7. Customers arrive at a rate of 180 per hour at either of two vending machines, each of which can service 240 customers per hour. Assuming a Poisson distribution for arrivals and an exponential distribution for the service time, determine the expected waiting time per customer. Recalculate if one of the vending machines is broken and cannot be used. Q8. In Question 7 above, if the cost of operating a vending machine over its lifetime is $100 per day, and the cost of having customers waiting for service is 50 cents per minute, what is the optimum number of vending machines?