Seattle-Pipes Co. produces pipes to be supplied to a Seattle utility company. The requirement of the...

Seattle-Pipes Co. produces pipes to be supplied to a Seattle utility company. The requirement of the utility company is that the pipes need to be 200 cm long. Longer pipes are acceptable to the utility company but any pipe less than 200 cm is rejected. Seattle-Pipes loses all its production cost on pipes that are rejected.

The production process is such that it has some variability in the lengths of pipes produced, and this variability can be well approximated by a Normal distribution. Seattle- Pipes can adopt one of the following three production processes:

Process A: Produces pipes with an average length of 200 cm and a standard deviation of 0.5 cm
Process B: Produces pipes with an average length of 201 cm and a standard deviation of 1 cm
Process C: Produces pipes with an average length of 202 cm and a standard deviation of 1.5 cm

If Seattle-Pipes adopts the third Process (Process “C”), what is the probability it will haveits pipe rejected by the utility company? Enter your answer as a decimal probability (not a percent) rounded to 4 decimal places.
b) Seattle-Pipes temporarily changes its requirements and has a new requirement that it will accept any pipe of length from 199 cm to 202 cm. That is, pipes ranging in length from 199 cm to 202 cm will be accepted, others will be rejected.

With this changed requirement, which production process (out of the 3) will result in the smallest percentage of rejections?
c) Seattle-Pipes earns a revenue of $200 for every pipe that gets accepted and loses all money for any pipe that is rejected. The cost of producing the pipes is $140 per pipe ifproduction process “A” is used, $160 per pipe if production process “B” is used, and $177 per pipe if production process “C” is used.

Given this information, which production process would you recommend to maximize profits (revenue minus cost) if the requirement of the utility company is that pipes need to be of 200 cm (or more) and any pipe shorter than 200 cm is rejected?

Expert Solution

I am sorry..as the images are not uploaded in order.

orchestra answered 1 year ago

5. A company produces metal pipes of a standard length, and claims that the variance of...

5. A company produces metal pipes of a standard length, and claims that the variance of the length is 1.44 cm. One of its clients decide to test this claim by taking a sample of 25 pipes and checking their lengths. They found that the standard deviation of the sample is 2.4 cm. Does this undermine the company’s claim? A. State the hypotheses b. Find the calculated value of the test statistic c. Find the critical value at α =...

Following the method outlined in the Jamison reading, calculate the revenue requirement for a utility company...

Following the method outlined in the Jamison reading, calculate the revenue requirement for a utility company with a rate base of $50 million, a cost of equity of 20%, an equity financing proportion of 35%, and a tax rate of 37%. Assume that the values for expenses (E) and depreciation (d) are identical to the example in the Jamison reading.

Winter Tyme, Inc., produces coats and jackets for the Seattle market. The company is considering a...

Winter Tyme, Inc., produces coats and jackets for the Seattle market. The company is considering a new 3-year expansion project into the Portland market. The expansion requires an initial investment of $3.402 million in new plant and equipment. These assets will be depreciated straight-line to zero over its 3-year tax life, after which time the assets can be sold for $264,600. The expansion also requires an initial investment in net working capital of $378,000, but this investment will be recovered...

Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors...

Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors of the company’s pension fund management division. An important new client, the North-Western Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them by answering the following questions. a. What are the key features of a bond? b. What...

A machine produces pipes used in airplanes. The average length of the pipe is 16 inches....

A machine produces pipes used in airplanes. The average length of the pipe is 16 inches. The acceptable variance for the length is 0.3 inches. A sample of 17 pipes was taken. The average length in the sample was 15.95 inches with a variance of 0.4 inches. a. Construct a 95% confidence interval for the population variance. b. State the null and alternative hypotheses to be tested. c. Compute the test statistic. d. The null hypothesis is to be tested...

A generator at a utility company produces 100 A of current at 4.0 x 103 V....

A generator at a utility company produces 100 A of current at 4.0 x 103 V. The voltage is stepped up to 2.4 x 105 V by a transformer before being sent on a high voltage line across a rural area to a city. Assume the effective resistance of the line is 30.0 Ω and the transformers are ideal. a. Determine the percentage of power lost in the transmission line. b. What percentage would be lost if the voltage would...

A pipe is manufactured according to a process that produces 1 defective pipe per 5000 pipes...

A pipe is manufactured according to a process that produces 1 defective pipe per 5000 pipes produced. All pipes produced are subject to an x-ray inspection. 99.9% of all defective pipes fail the inspection (are correctly identified as defective). 0.2% of good pipes fail the inspection (are incorrectly identified as defective). 1)What is the probability that a randomly-selected pipe will fail the inspection? (E.g. enter 50% as 0.50.) 2) What is the probability that a pipe that passes the inspection...

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors...

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company's pension fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs responsible for equity investments. A major new client, the Northwestern Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the cities in the association, and Strother and Tibbs, who will make the actual presentation, have asked you to...

Recently a large regulated utility which supplied natural gas to residential customers filed for bankruptcy because...

Recently a large regulated utility which supplied natural gas to residential customers filed for bankruptcy because managers had incorrectly predicted a large increase in the price of natural gas and a large decrease in price occurred. Prior to bankruptcy, they had locked in suppliers to very long contracts, thinking the price would move up. At the time of the filing, this company was still viable but decided to file early to keep from draining the resources of the company. a....

The company you co-own filed a utility patent application several years ago for a new product.

Patent LawThe company you co-own filed a utility patent application several years ago for a new product. The patent application contains an independent claim and four dependent claims each describing various features of the components in the independent Claim 1. Claim 2 depends on Claim 1, Claim 3 depends on Claim 2, Claim 4 depends on Claim 3, and Claim 5 depends on Claim 1. In the Office Action the examiner rejects Claims 1, 3, and 4, but allows Claims...

Question