Idle production capacity may be related to inventory or capacity management. How would the pricing component of the marketing mix reduce idle production capacity for (a) a car wash, (b) a stage theater group, and (c) a university?
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Idle production capacity may be related to inventory or capacity management. How would the
pricing component of the marketing mix reduce
idle production capacity for (a) a car wash, (b) a
stage theater group, and (c) a university?
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- EZ-Windows, Inc. manufacturers replacement windows for the home remodeling business. In January, the company produces 15,000 windows and ended the month with 9,000 windows in inventory. EZ-Windows' management team would like to develop a production schedule for the next three months. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a similar month-to-month operation. However, given the sales forecasts, the productioncapacities, and the storage capabilities as shown in Table 2, the management team does not think a smooth production schedule with the same production quantity each month possible.The company's cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the…1.Why is sustainability an important component in a firm's strategy development. 2. What production strategy would you say best describes the construction of the akosombo dam. 3. Identify the production process likely to be used By a paper mill and justify your answer. 4. Explain why capacity is a major operational issue with service organizations.Hickory Manufacturing Company forecasts the following demand for a product (in thousands of units) over the next five years. Year 1 2 3 4 5 Forecast demand 62 84 86 90 90 Currently the manufacturer has seven machines that operate on a two-shift (eight hours each) basis. Thirty days per year are available for scheduled maintenance of equipment with no process output. Assume there are 250 workdays in a year. Each manufactured good takes 20 minutes to produce. What is the effective capacity of the factory? Round your answer down to the nearest whole number. units/year Given the five-year forecast, how much extra capacity is needed each year? Use a minus sign to enter an answer, if there is excess capacity. Round your answers to the nearest whole number. Year 1 2 3 4 5 Extra capacity needed (units) Does the firm need to buy more machines? If so, how many? When? If your answer is zero, enter "0". Round your answers up to the nearest whole number.…
- Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.Draw a…Spectrum Hair Salon is considering expanding itsbusiness, as it is experiencing a large growth. Th e question iswhether it should expand with a bigger facility than needed,hoping that demand will catch up, or with a small facility,knowing that it will need to reconsider expanding in three years.Th e management at Spectrum has estimated the followingchances for demand:• Th e likelihood of demand being high is 0.70.• Th e likelihood of demand being low is 0.30.Estimated profi ts for each alternative are as follows:• Large expansion has an estimated profi tability of either$100,000 or $70,000, depending on whether demand turnsout to be high or low.• Small expansion has a profi tability of $50,000, assuming thatdemand is low.• Small expansion with an occurrence of high demand wouldrequire considering whether to expand further. If thebusiness expands at this point, the profi tability is expected tobe $90,000. If it does not expand further, the profi tability isexpected to be $60,000.(a) Explain how the long-run average cost curves will differ between a private hospital and a soft-drink manufacturing company, and discuss how this would affect the optimum output level in each company. (b) Formidable Manufacturing Company has the following cost functions in the short run, where production level, Q is measured in ‘000s of units:?? = 0.5?3 − 2?2 + 5??? = 7(i) Calculate the optimum output level for this company in the short run (ii) Calculate the marginal cost for this company at a production level of 2,500 units(iii) The industry for in which Formidable Manufacturing Company operates classifies its members by the following output:Size Micro Small Medium LargeOutput (Q): 0-1000 1000-3000 3000-6000 >6000In the long run, the AVC for this industry is given by: ??? = 0.4?2 − 3? + 15.Determine the optimum plant size for this industry. (c) In merging with Air Jamaica, Caribbean Airlines sought to gain an advantage from operating with economies of scale. Discuss the ways in…
- Please do not give solution in image format thanku Bob's candle factory is considering three different manufacturing options. Option A uses hand labor with fixed costs of $10,000 and variable costs of $2.75/candle. Option B uses a combination of hand and automation with fixed costs of $15,000 and variable costs of $1.10/candle. Option C is highly automated with fixed costs of $20,000 and variable costs of $0.75/candle. a. If demand for Bob's candles is 2500, which option should he pick, and what is the cost? b. If demand for Bob's candles is 4500 which option should he pick, and what is the cost?An urgent care clinic is staffed by two physicians who can each see four patients per hour. The clinic is open 6 p.m. until midnight, seven days per week. The clinic tracked the average number of patients arriving by hour for a month and observed the following:Time Demand6–7 87–8 108–9 109–10 410–11 411–12 2a. Sketch a graph with one line showing capacity and another line showing demand.b. What observations do you make from the graph in part a?c. What suggestions would you make to the clinic for managing its capacity?Andrew Manufacturing held an average inventory of $1.5 million (raw materials, work-in-process, finished goods) last year. Its sales were $8.5 million, and its cost of goods sold was $6.2 million. The firm operates 290 days a year. What is the inventory days’ supply? What target inventory level is necessary to reach a 15- and 10-day inventory days supply during the next two years?
- Capacity planning requires a demand forecast for an extended period of time into thefuture. What concerns would you have regarding an extended forecast as a capacityplanner?You have been asked to estimate the cost of 100 prefabricated structures to be sold to a local school district. Each structure provides 1,000 square feet offloor space, with 8-feet ceilings. In 1999, you produced 70 similar structures consistingof the same materials and having the same ceiling height, but each provided only 800square feet of floor space. The material cost for each structure was $25,000 in 1999, andthe cost capacity factor is 0.65. The cost index values for 1999 and 2006 are 200 and 289,respectively. The estimated manufacturing cost for the first 1,000-square-foot structureis $12,000. Assume a learning curve of 88% and use the cost of the 50th structure asyour standard time for estimating manufacturing cost. Estimate the total material costand the total manufacturing cost for the 100 prefabricated structures.Hill’s operations manager (see Problems 13.3 through13.5) is also considering two mixed strategies for January–August: Produce in overtime or subcontracting only when there isno inventory.◆ Plan D: Keep the current workforce stable at producing1,600 units per month. Permit a maximum of 20% overtime atan additional cost of $50 per unit. A warehouse now constrainsthe maximum allowable inventory on hand to 400 units or less.◆ Plan E: Keep the current workforce, which is producing 1,600units per month, and subcontract to meet the rest of the demand.Evaluate plans D and E and make a recommendation.