Production/Operation Management Quiz 4

The company started off producing 20,000 units of mountain bikes. We did not change the production quantity. Last year our forecast sales were 24,000 when we only sold 19,866; therefore we thought it would be best to leave production at 20,000 bikes. Having excess inventory, we concluded that 20,000 units should be enough considering our quality has not changed and our advertising will not increase the sales dramatically. Although we had the choice to produce as much as 30,000 units, we felt as though we did not have sufficient money to increase production. We were interested in allocating the money towards marketing as opposed to production. We realized that without awareness, no matter how many units we make, sales would be inefficient.

Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

| Balance the line using the largest number of following tasks, so that only four workstations are required. Use the longest task time as a secondary criterion. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 1 decimal place.)

The most suitable costing method Yeltin should adopt is the practical capacity in order to remove the factor of uncertain budgeted sales figure. For this approach and the practical capacity of 65000-22000 units, then the revised overhead costs come out to be $30. With the inclusion of material and labor costs, the cost of the cartridge stand at $52 and the additional royalty expense of $10 raises the overall per unit cost to $62. The selling price of the cartridge is fixed at $150. With this selling price, the gross margin is equal to $88. The gross margin percentage is equal to 59%. In comparison to the budgeted volume, the gross margin has increased by 14%. See below

Answer: Capacity is the maximum rate of output of a process or a system. And utilization is measured as the ratio of average output rate to maximum capacity. In Southwest, capacity can be measured in available seat-miles (AMS) pre month. Therefore, utilization can be measured as the ratio of average seat-mile rate to maximum

Q.1) Compute the following quantities for the current production process as well as for Mike’s and Ike’s plans, assuming the plans are implemented as described in the case.

1. When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is ( )

The first thing that the production manager must consider is the optimal quantity of cases that can be produced. The marketing manager has indicated that if the economy is strong then Motorking will sell 100,000 cases. If the economy is moderate Motorking will sell 70,000 cases, and if the economy is weak, then

was 7,920 units. The company has provided the following data concerning the formulas to be used in its

Each week there are 300 pounds of material 1; 400 pounds of material 2; and 200 hours of labor. The output of product A should not be more than one-half of the total number of units produced. Moreover, there is a standing order of 10 units of product C each week.

Since the capacity is being expanded to increase production of Product C, it could be assumed that this increase should be allocated to this product. Production of Product A is to be scaled down, but its level of

In the calculation it can be said that they only 7 stations are needed. With this number of workstations one could achieve the highest efficiency at this moment. But the company will grow rapidly. Therefore they had to add new stations every year.

First, we need to calculate employee’s working time per year, employees work for 42-2=40 hours per 5-day week. 40 hours times 52 weeks plus 8 hours for an additional day equals to 2088 hours, minus 14 days off work, the total work time is 1976 hours or 118,560 minutes. This number can be used to calculate the cost per minute of all types of staff except

Problem #2.” (To make your life easier, optimal stocking quantity, Q, is computed by the