Most firms underestimate the cost and time requirements of the SDLC by as much as 5 percent. Why do you think this occurs? In what stages do you think the underestimates are most dramatic?
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Most firms underestimate the cost and time requirements of the SDLC by as much as 5 percent. Why do you think this occurs? In what stages do you think the underestimates are most dramatic?
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- Most companies underestimate the SDLC's costs and needs by up to 50%. Do you have any theories as to why this happens? Which phases do you believe have the most drastic underestimations?Suppose a new production method will be implemented if a hypothesis test supports the conclusion that the new method reduces the mean operating cost per hour. State the appropriate null and alternative hypotheses if the mean cost for the current production method is $220 per hour. What is the Type I error in this situation? What are the consequences of making this error? What is the Type II error in this situation? What are the consequences of making this error?Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
- The president of Poleski would like to know the effect that each of the following suggestions for improving performance would have on contribution margin per unit, sales needed to break even, and projected net income for next year. Each change should be considered independently. Reset the Data Section to its original values after each suggestion is analyzed. Fill in the table following the suggestions with the results of your analysis. a. The president suggests cutting the products price. Since the market is relatively sensitive to price, . . . a 10% cut in price ought to generate a 30% increase in sales (to 156,000 units). How can you lose? b. The sales manager feels that putting all sales personnel on straight commission would help. This would eliminate 77,000 in fixed sales salaries expense. Variable sales commissions would increase to 2.00 per unit. This move would also increase sales volume by 30%. c. Poleskis head of product engineering wants to redesign the package for the product. This will cut 1.00 per unit from direct materials and 0.50 per unit from direct labor, but will increase fixed factory overhead by 100,000 for additional depreciation on the new packaging machine. The package redesign would not affect sales volume. d. The firms consumer marketing manager suggests undertaking a new advertising campaign on Facebook. This would cost 30,000 more than is currently planned for advertising but would be expected to increase sales volume by 30%. e. The production superintendent suggests raising quality and raising price. This will increase direct materials by 1.00 per unit, direct labor by 0.50 per unit, and fixed factory overhead by 110,000. With improved quality, . . . raise the price to 18.50 and advertise the heck out of it. If you double your current planned advertising, Ill bet you can increase your sales volume by 30%.Because of high production-changeover time and costs, a director of manufacturing must convince management that a proposed manufacturing method reduces costs before the new method can be implemented. The current production method operates with a mean cost of $220 per hour. A research study will measure the cost of the new method over a sample production period. Develop the null and alternative hypotheses most appropriate for this study. Comment on the conclusion when H0 cannot be rejected. Comment on the conclusion when H0 can be rejected.Berwin Inc. is a small industrial equipment manufacturer with approximately $3.5 million in annual sales.Berwin can always compete with other small appliance manufacturers. However, the market expandsonly when there is product innovation. The following is information on Berwin Inc's performance report:Required : Compute and analyze if the variance is favorable or unfavorable! Identify the strengths and weaknesses of the performance report and give your explanation! How should the report be revised to eliminate these weaknesses? Please explain!
- In linear breakeven analysis, if process A has a variable cost of $45 per unit and process B has a variable cost of $31 per unit, which alternative would be preferred if the breakeven point is 7400 units and production is expected to be 6200 units? (a) Process A (b) Process B (c) Process B if its fixed cost is lower than the fixed cost of Process A (d) Cannot tell; need more informationIn most cases, if a i rm increases its service capacity by 10 percent, it would expect waiting times to be reduced by what percentage? Assume customer arrivals and service times are random.How much would be the net effect on the total segment profit if product B is dropped and discontinued? Assume that by dropping product B, product A would increase A's sales by 80%. How much would be the net effect on the total segment profit? Assume that by dropping product B, product A would decrease A's sales by 20%. Moreover, 30,000 of common costs allocated are avoidable. How much would be the net effect on the total segment profit?
- Peterson Corporation is considering implementing a JIT production system. The new system would reduce current average inventory levels of $2,000,000 by 75%, but it would require a much greater dependency on the company’s core suppliers for on-time deliveries and high-quality inputs. The company’s operations manager, John Leung, is opposed to the idea of a new JIT system. He is concerned that the new system (a) will be too costly to manage; (b) will result in too many stock outs; and (c) will lead to the layoff of his employees, several of whom are currently managing inventory. He believes that these layoffs will affect the morale of his entire production department. The management accountant, Susan Chow, is in favour of the new system, due to the likely result in cost savings. John wants Susan to revise her cost saving estimation because he is concerned that top management will give more weight to financial factors and not give due consideration to nonfinancial factors such as employee…Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: Possible Market Reaction Sales in Units Probabilities Low response 10 0.30 Moderate response 25 0.20 High response 40 0.30 Very high response 65 0.20 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Sloan Corporation has the following estimates for its new gear assembly product: Price per unit = $1,220 Variable cost per unit = $380 Fixed costs = $3.75 million Quantity = 90,000 units Suppose the company believes all its estimates are accurate only to within +/- 15%. A. What values should the company use for the four variables given here when it performs its best-case scenario analysis? B. What should it use for its worse-case scenarios analysis? C. Are there any potential concerns with the building of these scenarios?
