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Module 6 Problem Set

Module 6 Problem Set

Q Scenario 1: Trash Pick-up in Columbia Residents of Columbia, MD place their trash at the curb each Wednesday morning to be picked up by municipal crews. Experience shows that the total amount of trash put out has a normal distribution with a mean of 40 tons and a standard deviation of 9 tons. Crews of full-time city employees collect the trash. Each crew can collect 6 tons of trash per day. The city has plenty of trucks of the kind used for trash collection. The marginal cost of operating one trash crew for one day including both personnel-related and truck-related costs is $800. Whatever trash remains at the end of the work day be collected that evening by an outside contractor who charges $650 per ton. How many crews should the city assign to trash collection to minimize expected total cost? In other words what number of crews (1, 2, 3, etc.) produces the lowest expected cost?

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Scenario 1: Trash Pick-up in Columbia The residents generate a mean of 40 tons and a standard deviation of 9 tons, which means that the maximum amount of generated waste is 49 tons. Since each crew can collect 6 tons of trash per day, the number of crews needed to collect trash is: Number of crews=Amount of waste/waste/Amount of trash collected by one crew=49/6=8 crews. If the community has eight crews, the cost of collecting trash will be: Cost=Cost of operating one trash crew*8+Cost of an outside contractor=$800*8+$650=$7050. In this case, hiring an outside contractor to collect remaining trash ($650/ton) is less expensive than hiring 9 crews to clean the streets. While the cost of hiring eight crews plus one outside contractor is $7050, the cost of hiring 9 crews to collect all trash is $7,200.