Creative Cabinets Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplished this, the company has gathered the following production cost data: ANNUALIZED VARIABLE COSTS PER UNIT PROCESS TYPE FC LABOR MATERIAL ENERGY MASS $1,260,000 30 18 17 CUSTOMIZATION INTERMITTENT 1,000,000 34 16 20 REPETITIVE 1,425,000 28 20 15 CONTINUOUS 1,600,000 25 25 13 Creative Cabinets projects an annual demand of 18,000 units for the maxistand. The maxistand will sell for $195 per unit. What is the difference between the highest and lowest profit.
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- Tribal Systems, Inc., is opening a new plant and has yet todecide on the type of process to employ. A labor-intensiveprocess would cost $10,000 for tools and equipment and$14 for labor and materials per item produced. A more automated process costs $50,000 in plant and equipment buthas a labor/material cost of $8 per item produced. A fullyautomated process costs $300,000 for plant and equipmentand $2 per item produced. If process selection were basedsolely on lowest cost, for what range of production wouldeach process be chosen?Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Annualized Fixed Cost of Plant & Equipment Variable Costs (per unit) ($) Process Type Labor Material Energy Mass Customization $1,260,000 30 18 12 Intermittent $1,000,000 24 26 20 Repetitive $1,600,000 28 15 12 Continuous $1,960,000 25 15 10 Metters Cabinets projects an annual demand of 24,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit. a) Based on the projected annual demand, the best alternative available is to use the Intermittent process. b) The value of annual profit using this method is $_____.Susan Williams runs a small Flagstaff job shopwhere garments are made. The job shop employs eight workers.Each worker is paid $10 per hour. During the first week ofMarch, each worker worked 45 hours. Together, they produceda batch of 132 garments. Of these gam1ents, 52 were "seconds"(meaning that they were flawed). The seconds were sold for $90each at a factory outlet store. The remaining 80 garments weresold to retail outlets at a price of $198 per gannent. What wasproductivity, in dollars per labor-hour, at this job shop duringthe first week of March?
- Tribal Systems, Inc., is opening a new plant and has yet todecide on the type of process to employ. A labor-intensiveprocess would cost $10,000 for tools and equipment and $14 for labor and materials per item produced. A more au-tomated process costs $50,000 in plant and equipment but has a labor/material cost of $8 per item produced. A fullyautomated process costs $300,000 for plant and equipmentand $2 per item produced. If process selection were basedsolely on lowest cost, for what range of production wouldeach process be chosen?Climate Control, Inc., makes expedition-quality rain gearfor outdoor enthusiasts. Management prepared a forecast ofsales (in suits) for next year and now must prepare a produc-tion plan. The company has traditionally maintained a levelworkforce strategy. All nine workers are treated like familyand have been employed by the company for a number ofyears. Each employee can produce 2,000 suits per month.At present, finished goods inventory holds 24,000 suits. Thedemand forecast follows: Use the Sales and Operations Planning with SpreadsheetsSolver in OM Explorer or develop your own spreadsheetmodels to address the following questions. a. Management is willing to authorize overtime in pe-riods for which regular production and current lev-els of anticipation inventory do not satisfy demand.However, overtime must be strictly limited to no morethan 20 percent of regular-time capacity. Managementwants to avoid stockouts and backorders and is notwilling to accept a plan that calls for shortages.…A chair manufacturer who produces three different models ( A,B and C) has developed a master production schedule(MPS) for the coming 5 weeks.Historically , worker productivity has averaged 8 units/week/employee based on the “typical mix of Chair”.The company employs 50 workers. The standard labour hours for the chairs are 1.0, 2.0, and 1.5 hours for models A,B and C respectively.Evaluate capacity utilization of the MPS MPS(in units) Week no. 1 2 3 4 5 A 200 0 200 0 100 B 0 0 0 200 100 C 100 300 100 0 0
- Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Metters Cabinets projects an annual demand of 24,000 units for the Maxistand. The Maxistand will sell for $120 per unit.a) Which process type will maximize the annual profit from producing the Maxistand?b) What is the value of this annual profit?In planning its operations for the year based on sales forecast of P 6,000,000, the company prepared the following estimated data:Cost and expensesVariableFixedDirect materialsP 1,600,000Direct labor1,400,000Factory overhead600,000900,000Selling expenses240,000360,000Administrative expenses60,000140,000P 3,900,000P 1,400,000What would be the amount of sales in pesos at the break- even point?a. P2,250,000c. P4,000,000b. P3,500,000d. P5,300,000Up, Up, and Away is a producer of kites and wind socks.Relevant data on a bottleneck operation in the shop for theupcoming fiscal year are given in the following table:Item Kites Wind SocksDemand forecast 30,000 units/year 12,000 units/yearLot size 20 units 70 unitsStandard processing time 0.3 hour/unit 1.0 hour/unitStandard setup time 3.0 hours/lot 4.0 hours/lotThe shop works two shifts per day, 8 hours per shift, 200 daysper year. Currently, the company operates four machines,and desires a 25 percent capacity cushion. How many ma-chines should be purchased to meet the upcoming year’s de-mand without resorting to any short-term capacity solutions?
- The design capacity, effective capacity and efficiency for a car licensing operation are shown in the following table: Process Design capacity Effective capacity Efficiency Document checking 145,000 128,000 0.95 License production 1,250,000 900,000 0.15 Distribution 165,000 160,000 0.75 What are the expected output levels for each process? What are the utilization rates for each process?A seed company has a design capacity of 80 metric tonnes per day. It's effective capacity, However, is 64metric tonnes per day, and it's actual output is 62 metric tonnes per day. The operations manager would like to increase the number of Metric tonnes per day. Which of the following factors would you recommend that the operations manager investigate: quality problems, absenteeism, or scheduling?Identify where performance gaps exist in your operations process by employing the Gap Model. How to improve the demand forecasting of the prepared foods department of a supermarket company?During the last few years, ABC has been having issues with the “prepared foods” department, which has X in total people as headcount (X operators and one supervisor). They are distributed to cover the X shift the store has per day. There are two sub-departments, prepared meals and prepared soups & salads. Each one could be sold in two presentations, packaged or self-serve buffet-like. Likewise, every meal prepared and packaged by the operators in the store only has an average of X of useful life and must be thrown away a day before its expiration. Among the issues in the department, five affect the performance of the store and category. The lack of production planning: the preparation of every meal is not based on sales, demand, days of the week, weekends, or seasonal campaigns. Instead, it is…