Kwick Engineering Company (KEC) had received a contract to produce six units of new automated sheet cutting machine. Design, engineering and finishing department involved. For first unit 3250 hours required from design department, 1780 hours required from engineering department. 731 hours required for second unit from finishing department. Learning rate vary for each department. It was assessed that there is 70% learning rate in engineering department, 85% learning rate in finishing department while 75% learning rate in design department. Each unit requires fixed cost of $45000 for materials and equipment usage. KEC completed these six units and delivered on time to the customer. Immediately after receiving the order of six units, customer asked to submit a bid for and order of additional 18 units. (for simplicity asssme that same learning process continue). Labor cost per hour in design department is $32 while 1.5 times of design department in engineering and $26 per hour in finishing department. a. What will the total cost to build these additional units if KEC wants 16.50% profit? b. What will be the average time requiring from engineering department for these additional units? c. What will be the average cost of first eight units of these additional units order? d. How much time required by finishing department to complete 16th unit of these additional units?
Kwick Engineering Company (KEC) had received a contract to produce six units of new automated sheet cutting machine. Design, engineering and finishing department involved. For first unit 3250 hours required from design department, 1780 hours required from engineering department. 731 hours required for second unit from finishing department. Learning rate vary for each department. It was assessed that there is 70% learning rate in engineering department, 85% learning rate in finishing department while 75% learning rate in design department. Each unit requires fixed cost of $45000 for materials and equipment usage. KEC completed these six units and delivered on time to the customer. Immediately after receiving the order of six units, customer asked to submit a bid for and order of additional 18 units. (for simplicity asssme that same learning process continue). Labor cost per hour in design department is $32 while 1.5 times of design department in engineering and $26 per hour in finishing department. a. What will the total cost to build these additional units if KEC wants 16.50% profit? b. What will be the average time requiring from engineering department for these additional units? c. What will be the average cost of first eight units of these additional units order? d. How much time required by finishing department to complete 16th unit of these additional units?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Kwick Engineering Company (KEC) had received a
contract to produce six units of new automated
sheet cutting machine. Design, engineering and
finishing department involved. For first unit 3250
hours required from design department, 1780 hours
required from engineering department. 731 hours
required for second unit from finishing department.
Learning rate vary for each department. It was
assessed that there is 70% learning rate in
engineering department, 85% learning rate in
finishing department while 75% learning rate in
design department. Each unit requires fixed cost of
$45000 for materials and equipment usage. KEC
completed these six units and delivered on time to
the customer. Immediately after receiving the order
of six units, customer asked to submit a bid for and
order of additional 18 units. (for simplicity asssme
that same learning process continue). Labor cost per
hour in design department is $32 while 1.5 times of
design department in engineering and $26 per hour
in finishing department. a. What will the total cost to
build these additional units if KEC wants 16.50%
profit? b. What will be the average time requiring
from engineering department for these additional
units? c. What will be the average cost of first eight
units of these additional units order? d. How much
time required by finishing department to complete
16th unit of these additional units?
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