Steel Works Inc. is a mill that recycles shredded scrap steel into usable products such as...

Steel Works Inc. is a mill that recycles shredded scrap steel into usable products such as alloy for communication equipment, coils for appliances and wire for cable connectors.

With the increase in orders, the manufacturing process bottlenecks at the rolling machine. The company has placed an order for a second machine, but it will not be available for another month.

Below are orders for the upcoming month and current revenue and cost data:

	Alloy	Coils	Wire
Units ordered	1,000	750	600
CM per unit	$140	$45	$75
Units per hour in machine	10	3	30

If the coil rolling machine can be operated for 300 hours in a month, will all orders be fulfilled this month?
If not, what order should the products be made to maximize NOI for the month?
How many machine hours should be allocated to each product to maximize NOI for the month?
How many units of each product should be made to maximize NOI for the month?
What would cause the company to decide NOT to follow the above plan and maximize profits?

Expert Solution

ekkarill92 answered 2 years ago

Sylvester’s Steel Works is a mini mill that recycles shredded scrap steel into usable products such...

Sylvester’s Steel Works is a mini mill that recycles shredded scrap steel into usable products such as alloy (e.g., communication equipment), coils (e.g., appliances), steel bars (e.g., reinforcing concrete), and wire (e.g., cable connectors). Sylvester’s starts with a basic feed stock of shredded scrap steel and then melts and purifies the steel via its high-powered electric furnace. The molten metal is next transferred for processing in Sylvester’s Cold Rolling Mill (CRM), which is the bottleneck machine in Sylvester’s manufacturing process....

Betty's works in a steel mill making steel cables. Suppose cable strength can be altered in...

Betty's works in a steel mill making steel cables. Suppose cable strength can be altered in two different ways: thickness and the amount of molybdenum (an element used to make steel) it has. She wants to figure out the strongest cable she can make so she test several different cable formulas each many times. Below is a portion of the data she uses to run a regression with Thickness and Molydenum predicting Strength: Strength (Kilonewton, kN) Thickness (mm) Molybdenum (%)...

Integrated Case of Hope Steel, Inc. A Brief Profile of Hope STEEL works, inc. Hope Steel...

Integrated Case of Hope Steel, Inc. A Brief Profile of Hope STEEL works, inc. Hope Steel Works, Inc. – also known to the local market as ‘Hope Steel’ - is one of the largest producers of concrete-reinforcement steel bars. It was established in December of 1964 by Mr. John Long, an industry pioneer whose work in the steel industry began in 1948, the company has built up a solid reputation for superior quality, good service, and fair prices. Hope Steel...

Tough Steel, Inc. is a processor of carbon, aluminum, and stainless steel products. The firm is...

Tough Steel, Inc. is a processor of carbon, aluminum, and stainless steel products. The firm is considering replacing an old stainless steel tube-making machine for a more cost-effective machine that can meet the firm’s quality standards. The old machine was acquired 2 years ago at an installed cost of $500,000. It has been depreciated under the MACRS’s 5-year recovery period, and has a remaining economic life of 5 years. It can be sold today for $350,000 before taxes, but if...

what are the differences in the application of EOQ to the purchase of scrap steel versus...

what are the differences in the application of EOQ to the purchase of scrap steel versus gold for electronic components?

Miner extracts iron from the earth. A steel mill converts the iron to steel beams for...

Miner extracts iron from the earth. A steel mill converts the iron to steel beams for use in construction. A construction company uses the steel beams to make a building. Assume that the total product of these firms represents the only components of the building and that they will have no other uses. Complete the following table: can you please provide detail work? Company Product Total Sales Value Added Acme Mining iron ore $100,000 ? Fuller Mill steel beams $175,000...

2. A mill cuts pieces of steel that are used as the base for the front...

2. A mill cuts pieces of steel that are used as the base for the front seats of automobiles. Steel is cut with a diamond saw and parts are required to be between plus or minus 0.005 inches as specified by the car manufacturing company. The reported measurements for 100 pieces of steel is the difference in inches between the actual length of the parts as measured by a laser apparatus and the specified measurement for the steel parts. For...

Presented below are selected transactions for Camren Products, Inc. for 2018. Jan. 1 Received $9,000 scrap...

Presented below are selected transactions for Camren Products, Inc. for 2018. Jan. 1 Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2007. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value. April 30 Sold a machine for $28,000 that was purchased on January 1, 2015. The machine cost $75,000, and had a useful life of 5 years with no salvage value. Dec. 31 Discarded...

Eastern Steel Manufacturing is considering acquiring Chicago Iron Works. Eastern Steel expects Chicago Iron Works’ free...

Eastern Steel Manufacturing is considering acquiring Chicago Iron Works. Eastern Steel expects Chicago Iron Works’ free cash flow in the first year following the closing date for the acquisition will be $125 million and that it will grow thereafter at the rate of 10% per year for the next 5 years. Eastern Steel’s WACC for the acquisition is 12%, and its investment banker estimates that the perpetuity growth rate for calculating the terminal value is 2% per year. Specify Chicago...

The weekly output of a steel mill is a uniformly distributed random variable that lies between...

The weekly output of a steel mill is a uniformly distributed random variable that lies between 110 and 175 metirc tons. 1. Compute the probability that the steel mill will produce more than 150 metric tons next week. 2. Determine the probability that the steel mill will produce between 120 and 160 metric tons next week.

Question