PAGE 1 Table 11-1 Boat Specifications Spring 2020 Group_Project MET 405 - Economic Analysis for Engineering and Technology Total points: 100 Due Date: April 23, 2020 by 11:59 pm Project Case: Harbor Delivery Service (HDS) is an over the water delivery service operating in several large port/metropolitan areas. Each branch office has from 5 to 15 boats in its fleet. Currently, each branch office purchases its boats locally based on the branch manager’s preferences. This has resulted in each branch having a mix of brands and models and both diesel- and gasoline-powered units in some ports. Maintenance for this mixed fleet is a major headache, and costs seem out of control. To better utilize resources, the company has been repositioning boats to avoid unnecessary purchases and idle resources. This has been far from a resounding success, as the receiving locations are not prepared to maintain the boats if they differ from those it currently has. The branch managers inevitably find major faults with the boats transferred into their site. Additionally, this causes the sites to need both diesel and gasoline refueling facilities, with the inevitable confusion and mistakes. The various types and brands also make it difficult to create a “brand image.” HDS has decided to centralize procurement of boats and to standardize on brands and fuel types. The task of standardizing the fleet has been assigned to a team consisting of the chief operating officer and three branch managers. The team has identified the size and configuration of boat that best meets the general needs of HDS but have been unable to agree on a common power unit. A poll of the branch managers finds that five out of ten branch managers prefer the gasoline option due to its higher speed, while two out of ten are indifferent to the choice of power unit. Marketing has expressed a preference for diesel power units. They claim that the customers perceive diesel units as less flammable and support this preference with data that shows that insurance premiums are $500 more per year for gasoline-powered boats. Marketing cannot show that demand has been impacted by power unit choice. You have been tasked with recommending the appropriate power unit. To support this task, you have constructed the following table (Table 11-1) based on the specifications of the two boats under consideration. Gasoline Diesel Purchase price $76,586 $97,995 Engine size 350 hp 300 hp Average speed (manufacturer’s estimate) Knots (nautical mile per hour) 21.1 17.4 Fuel consumption (gallons per hour) 26 17 Fuel capacity (gallons) 300 300 PAGE 2 The boat manufacturer (the only difference in the two boats is the engine) has supplied an estimate of the average speed of each unit and the fuel consumption based on this average speed. Since the boats are used in harbors and for fairly short runs, the higher speed of the gasoline engine is valued at only $50 per day. When not in use, the gasoline engines will be turned off, while the diesel units would idle and burn fuel at the rate of 1 gal per hour. Both units are seen as adequate to meet the delivery schedules/requirements of HDS. Your investigations into maintenance costs have determined that the diesel unit requires $9000 in annual maintenance (mainly for the cooling system), while the gasoline engine unit has an annual cost of $6000. Oil changes are $25 for the gasoline unit and $57 for the diesel unit. Oil changes occur every 100 hours of engine use. Diesel is estimated to run $2.95 per gallon while gasoline runs $3.15 per gallon. The branch offices are located adjacent to a fueling/service dock ran by another business unit of HDS’s parent company. The boats are docked at the fueling facility overnight and each evening the tanks are topped off before the boats are turned over to the maintenance crew for service and cleaning. Thus, nightly refueling stops cost $15, but if refueling must be done during the day it costs $55. The units will typically cover 200 nautical miles in the course of the day. Crews are changed every six hours. The delivery service operates 18 hours per day 7 days a week. The diesel units, if purchased, will be kept in service for 4 years before being sold for $48,000 each. The gasoline units will be sold after 3 years of service for $38,000. HDS’s minimum attractive rate of return (MARR) is 18%. How many nautical miles per day must be traveled to change your recommendation?

Consider the market for a good in which there are two income groups of buyers. There are 8 buyers with income $40 and 6 buyers with income $54. All buyers have the same utility function u = 20q − q2 + m, where q denotes the amount of the good and m the money left after buying the good. Denote the price of the good by p.

(a) For each income group, determine the individual demand of a buyer.

(b) Find the market demand and draw the demand curve.  

(c) Consider an individual buyer in income group $40. For the following prices, determine how much money is left with the buyer after buying the good: (i) p = 8, (ii) p = 13.  

In dogs, solid coat color (S ) is dominant over white spotted coat (s ). In a cross between two heterozygous dogs, what would be the probability of having a first litter of six pups, the firstborn with spotted fur, and then among the next five, three with solid fur and two with spotted fur; and then a second litter of seven pups in which the firstborn is spotted, the second born is solid, and then the remaining five pups are composed of three solid and two spotted animals.

A.

0.008

B.

0.0495

C.

0.066

D.

0.0247

E.

0.003

Consider two treatments for lung cancer: (1) radiation and chemotherapy and (2) immunotherapy. Treatment 1 costs $30,000. Treatment 2 costs $75,000.   With treatment 1, there is a 75% chance the patient will be alive in year 1 and a 50% chance in year 2, but the patient will die in year 3.   The quality of life is poor with treatment 1, 50% of full health in both years. With treatment 2, there is 50% chance of being alive in year 1 and a 40% chance of being alive in year 2, and a 30% chance of being alive in year 3 and the patient will be dead in year 4. However, the quality of life is much better: 90% of full health in years 1, 2, and 3. The discount rate is 5%.

a) How many QALY’s will each treatment yield?

b) Use the given costs and your answer to part a) to calculate the Incremental Cost Effectiveness Ratio (ICER) for the two treatments.

c) Based on what you know about the value of statistical life (VSL), does the more expensive treatment seem reasonably cost-effective? Explain.

Suppose Tokyo is planning to construct a new public park. Based on some market research, they have determined that the town’s 50 residents can be divided into two types with respect to their benefit from this public good. 20 of the town’s residents are of Type 1 and the other 30 residents are of Type 2. Each resident's individual demand for acres of park space is given by:

Type 1: Q_D = 20 – P

Type 2: Q_D = 40 – 2P

a. Solve for the aggregate demand of Tokyo’s 50 residents as a function of the number of acres. Be sure to write down equations for each section of the aggregate demand curve, as well as the interval of quantities each section spans.

b. Graph the aggregate demand curve calculated in part a. Make sure to label both intercepts, slopes, and the intersection of the two sections.

c. Suppose each acre of public park has a marginal cost of MC = 200 + Q . Solve for the socially efficient number of acres for the town to construct.

d. Calculate the total surplus the 50 residents of Tokyo's gain from constructing this public park.

A Gallup Poll showed that 44% of Americans are satisfied with the way things are going in the United States. Suppose a sample of 25 Americans are selected.

Find the probability that no less than 7 Americans are satisfied with the way things are going.

Find the probability that exactly 15 Americans are not satisfied with the way things are going.

Find the probability that the number of Americans who are satisfied with the way things are going differs by greater than 2 from the mean.

Find the probability that greater than 7 Americans are satisfied with the way things are going.

Find the probability that at least 15 Americans are not satisfied with the way things are going.

Find the probability that no more than 9 Americans are satisfied with the way things are going.

Find the probability that more than 40% but at most 65% of these Americans are satisfied with the way things are going.

Round to 4 decimals.

Week 3 In-Class Exercise C++

Payroll

Design a PayRoll class that is an abstract data type for payroll. It has data members for an employee’s hourly pay rate, number of hours worked, and total pay for the week.

Your class must include the following member functions:

• a constructor to set the hours and pay rate as arguments,

• a default constructor to set data members to 0,

• member functions to set each of the member variables to values given as an argument(s) to the function,

• member functions to retrieve the data from each of the member variables,

• an input function that reads the values of number of hours and hourly pay rate,

• an output function that outputs the value of all data members for an employee,

• void function to calculate the total pay for a week.

The input and output functions will each have one formal parameter for the stream.

Write a program with an array of seven PayRoll objects. The program should ask the user for the number of hours each employee has worked and will then display the amount of gross pay each has earned.

Input Validation: Do not accept values greater than 60 for the number of hours

worked.

Sample Output:

Enter the hours worked and pay rate for 7 employees:

Employee #1 pay rate: 15

Employee #1 hours worked: 40

Employee #2 pay rate: 20

Employee #2 hours worked: 35

Employee #3 pay rate: 18

Employee #3 hours worked: 40

Employee #4 pay rate: 22

Employee #4 hours worked: 38

Employee #5 pay rate: 15

Employee #5 hours worked: 40

Employee #6 pay rate: 20

Employee #6 hours worked: 32

Employee #7 pay rate: 22

Employee #7 hours worked: 40

Total pay:

Employee #1: 600.00

Employee #2: 700.00

Employee #3: 720.00

Employee #4: 836.00

Employee #5: 600.00

Employee #6: 640.00

Employee #7: 880.00

Press any key to continue . . .

ompare the 2014 inventory turnover results for two or more publicily traded companies. Examples: 1)AutoZone (a Memphis based company with Advance Auto, . Write an executive summary(two pages) detaling the respective inventory turnover ratios for the given period, giving the equivalent number of days of inventory for each company, and the potential financial impact if the under-performing company could match the inventory turnover ratio of the higher-performing company. Assume a 25% carrying cost ratio. Be careful to use the correct units for the financial impact

The Columbus Dispatch conducted a study. Two identical football, one filled with helium and one filled with ordinary air, were used. A casual observer was unable to detect a difference in the two footballs. A novice kicker was used to punt the footballs. A trial consisted of kicking both footballs in a random order. The kicker did not know which football he was kicking. The distance of each punt was recorded, then another trial was conducted. A total of 39 trials were run. Do the data indicate that helium-filled footballs travel farther than air-filled footballs? Give a confidence interval and significance test. (Data: FTBALL)

Sunset Bakers needs to purchase an oven. They are considering two alternatives:

Alternative 1: A Conventional Oven will cost $12,000 and can be expected to last 8 years, and will have a salvage value of $1,000 at the end of year 8. The cost of electricity used will be $2,500 per year. Maintenance cost will be $200 per year. In year 4 the heating element will need to be replaced at a cost of $850.

Alternative 2: A High efficiency Oven will cost $14,500 and can be expected to last 8 years, and will have a salvage value of $2,000 at the end of year 8. The cost of electricity used will be $2,000 per year. Maintenance cost is will be $250 per year. In year 4 the heating element will need to be replaced at a cost of $850. In year 5 the fan motor will need to be replaced at a cost of $500. Assume the services provided by the ovens are identical; assume an interest rate of 10%.

Compare the ANNUAL EQUIVALENT costs of the 2 alternatives and make a recommendation for selection.