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Exercise3

• Graphically illustrate the break-even volume for the Evergreen Fertilizer Company determined in Exercise2

Exercise4

• Students are organizing a contest. They know that at least 100 students will attend. The rental fee for the hall is $150 and the winning student will receive $500. In order to guarantee that they break even, how much should they charge for each ticket?

Exercise4

• Fixed cost (cf) = $150 + $500 = $650
• Total variable cost (vcv ) = none
• Volume (p) = 100 students
• Total revenue (vp) = 100p
• To break even
• vp = cf + vcv
• 100p = 650
• P= $6.50
• Therefore they should charge $6.50 for each ticket

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• Figure 1.6 Modeling Techniques

• Classification of Management Science Techniques

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• Linear Mathematical Programming - clear objective; restrictions on resources and requirements; parameters known with certainty. (Chap 2-6, 9)
• Probabilistic Techniques - results contain uncertainty. (Chap 11-13)
• Network Techniques - model often formulated as diagram; deterministic or probabilistic. (Chap 7-8)
• Other Techniques - variety of deterministic and probabilistic methods for specific types of problems including forecasting, inventory, simulation, multicriteria, etc. (Chap 10, 14-16)

• Characteristics of Modeling Techniques

Some application areas:

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• Some application areas:
• - Project Planning
• - Capital Budgeting
• - Inventory Analysis
• - Production Planning
• - Scheduling
• Interfaces - Applications journal published by Institute for Operations Research and Management Sciences (INFORMS)

• Business Use of Management Science

• Management science is an art.