1. Connery Timber owns the rights to log on a 40,000-acre parcel of federal land in western Washington State. The company can log this property in three ways: full clearcut, partial clearcut, or selective removal.
   Due to controversy over the spotted owl and other species native to the area, Connery must prepare an environmental statement describing how it will log the land. The environmental statement will be reviewed by citizen groups and the state and federal government. Both the state and federal government must approve the environmental statement before Connery can log the property.
   Company foresters estimate that the land contains an average of 360 harvestable trees per acre, and each cut tree is worth $50 to the company. The following listing presents the percentage yield per acre and the cost per acre for the three methods of harvesting the trees.

   Harvesting Method	Yield per Acre	Cost per Acre
   Full clearcut	95%	$8000
   Partial clearcut	80%	$7000
   Selective removal	70%	$9000

   
   In the past, similar proposals have been submitted to state and federal agencies, yielding the following percentages of state approvals:

   Harvesting Method	Percentage Winning State Approval
   Full clearcut	40%
   Partial clearcut	60%
   Selective removal	90%

   
   Whenever the company gains state approval, it then applies for federal approval. The percentage of past proposals that won state approval which then won federal approval are as follows:

   Harvesting Method	Percentage of State-Approved Projects Winning Federal Approval
   Full clearcut	40%
   Partial clearcut	60%
   Selective removal	90%

   
   Connery also has the option of including in its environmental statement a pledge to donate 10,000 acres of land it owns to the national park system for a wilderness preserve. The value of this land to Connery is $5 million. If the company pledges this donation, it estimates that the probability that the environmental statement will be approved by the two governmental agencies is as follows:

   Harvesting Method	Probability of State and Federal Approval
   Full clearcut	0.70
   Partial clearcut	0.95
   Selective removal	1.00

   
   If the company’s environmental statement is not approved, it will forfeit its right to harvest this land and the lease will be turned over to another logging company. In this event, the company will receive net compensation of $1000 per acre.
   What are your recommendations regarding the company’s optimal strategy for this land? Include with your recommendations the decision tree used in your analysis and all detailed calculations.
2. Lazenby Motors is an auto dealership that specializes in the sale of station wagons and light trucks. Because of its reputation for quality and service, Lazenby has a strong position in the regional market, but demand remains somewhat sensitive to price. While evaluating the new models, Lazenby’s marketing consultant has come up with the following demand curves:

Truck Demand = 500 – 18 (Truck Price)

Wagon Demand = 400 – 11 (Wagon Price)

(The prices in the above formulas are in units of thousands of dollars.) The dealership’s unit costs are $20,000 for trucks and $25,000 for wagons. Each truck requires three hours of prep labor, and each wagon requires two hours of prep labor. The current staff can supply 250 hours of labor.

1. Determine the prices as which Lazenby Motors can maximize the profit it generates from the combines sales of trucks and wagons.
2. What is the marginal value of the current staff’s labor hours? (Hint: how much is an additional labor hour worth?)

1. The Hotel Moore found that it frequently turned down a customer in the lobby because a room was reserved for a customer who never showed up. The manager felt that the hotel’s policy of overbooking should be examined.
   The average room rate was $50 per night, but the hotel could not collect the room rate from the no-show customers. If no overbookings were allowed, each no-show in reality cost the hotel $50. If it overbooked too much and filled up early in the night, customers with reservations who arrived later to find no rooms available would be most unhappy. About 10% of those customers did not cost the hotel any money; they merely muttered menacingly and walked out. Another 10% were satisfied with being "walked" (or transferred) to another hotel at no cost to the Hotel Moore. The remaining guests were so upset by this situation that the hotel had to repair broken lobby furniture at a cost of $150 for each upset guest.
   The hotel’s no-show experience is summarized in the following table:

   No-Shows	% of Experiences
   0	5
   1	10
   2	20
   3	15
   4	15
   5	10
   6	5
   7	5
   8	5
   9	5
   10	5

   
   What should the overbooking policy be?
2. Daltoncorp produces sausage by blending together beef head, pork chuck, mutton, and water. The cost per pound, fat per pound, and protein per pound for these ingredients are as follows:

   	Head	Chuck	Mutton	Water
   Fat (per lb)	0.05	0.24	0.11	0.00
   Protein (per lb)	0.20	0.26	0.08	0.00
   Cost (in ¢)	12.00	9.00	8.00	0.00

   
   Daltoncorp needs to produce 100 lbs of sausage and has set the following goals, listed in order of priority:
   Goal 1: Sausage should consist of at least 15% protein.
   Goal 2: Sausage should consist of at most 8% fat.
   Goal 3: Cost per pound of sausage should not exceed 8¢.
   Formulate and solve a goal programming model for Daltoncorp.
3. The manager of Brosnan’s Burger Bar is worried about her capacity to serve customers at the take-out window. Customer arrivals to Brosnan’s window have an interarrival time that is normally distributed with a mean of 5 minutes and a standard deviation of 0.5 minutes. Service times are normally distributed with a mean of 4 minutes and a standard deviation of 1 minute. Develop a spreadsheet model to simulate the arrival of 50 customers. Collect information on the time the window is not idle and on the distribution of waiting time for customers.

Price: $27.02

Solution: The downloadable solution consists of 14 pages, 1302 words and 4 charts.
Deliverable: Word Document