Problem 1 Knott's Industries manufactures three models of backyard swings: Standard, Deluxe, and Premium. Currently it has five identical swing-set-making machines. Which are operated 8 hours each day, 5 days a week, 50 weeks per year. A capacity cushion of 18% is desired. The following information is also known: Lot Size (units/lot) Model Time Annual Demand Forecast Processing (min/unit) Setup (min/lot) Pessimistic Expected Pessimistic Standard 8. 30 50 15,000 18,000 28,000 Deluxe 10 40 40 12,000 15,000 23,000 Premium 14 50 30 6,000 12,000 14,000 a. Does Knott's have sufficient capacity to meet the minimum (pessimistic) demand, the expected demand, and the maximum (optimistic) demand? If not, how many more machines are needed in each case? b. If Knott's was able to reduce the setup time for all three models by 50% and triple the lot size for each model by implementing process improvements, would there be enough current capacity to produce 15,000 units of each type of swing? Show your work and explain. c. What is the maximum capacity cushion that is necessary for Knott to have enough capacity to meet the expected demand?

Problem 1 Knott's Industries manufactures three models of backyard swings: Standard, Deluxe, and Premium. Currently it has five identical swing-set-making machines. Which are operated 8 hours each day, 5 days a week, 50 weeks per year. A capacity cushion of 18% is desired. The following information is also known: Lot Size (units/lot) Model Time Annual Demand Forecast Processing (min/unit) Setup (min/lot) Pessimistic Expected Pessimistic Standard 8. 30 50 15,000 18,000 28,000 Deluxe 10 40 40 12,000 15,000 23,000 Premium 14 50 30 6,000 12,000 14,000 a. Does Knott's have sufficient capacity to meet the minimum (pessimistic) demand, the expected demand, and the maximum (optimistic) demand? If not, how many more machines are needed in each case? b. If Knott's was able to reduce the setup time for all three models by 50% and triple the lot size for each model by implementing process improvements, would there be enough current capacity to produce 15,000 units of each type of swing? Show your work and explain. c. What is the maximum capacity cushion that is necessary for Knott to have enough capacity to meet the expected demand?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $3.38 per search with a fixed cost of $28,000. A third-party online security firm offered to do a similar security search for $9.50 per person with an annual service contract with STE. If STE's forecast is 2,700 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for the breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to the nearest dollar. Breakeven quantity: searches Since the demand forecast of 2,700 searches is than the breakeven quantity, STE outsource the work. STE $ by outsourcing.
SHOW COMPLETE SOLUTION PLS BADLY NEEDED ASNWERS
A fabrication company engaged in production of a motor part has a production capacity of 700, 000 pieces per year. But, it is just operating at 62% of its full capacity due to unavailability to finance the importation of their materials. The company has an annual income of P 430, 000.00, annual fixed cost are P 190, 000.00 and variable costs are P 0.348 per unit. How many productions of parts must be produced for break-even point? Given:Required:Solution:
Fixed costs for Universal Exports are $600,000 annually. Its main-line export item is sold at a revenue of $2.10 per unit with variable costs of $1.50 per unit. (a) How many units must be sold each year for breakeven? (b) What would the annual profit be at sales of 1.3 million units? solve manually please <3
I see some mistakes on solve equations for x2. Please review so is a grade-3 polinomic equation: 0,08/(x2)2 + 12x2 = 15.000 Confirm, Thanks
Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
Samsung Electronics is trying to reduce supply chain risk by makingmore responsible make/buy decisions through improved cost estimation. A high-usecomponent (expected usage is 5000 units per year) can be purchased for $25 perunit with delivery promised within a week. Alternatively, Samsung can make thecomponent inhouse and have it readily available at a cost of $5 per unit, ifequipment costing $150,000 is purchased. Labor and other operating costs areestimated to be $35,000 per year over the study period of 5 years. Salvage isestimated at 10% of first cost and MARR is 12% per year. Neglect the element ofavailability (a) to determine the breakeven quantity, and (b) to recommend makingor buying at the expected usage level.
A vertical oil well has been drilled and completed. The productive zone is between the depths of 2,800 and 2,900 feet, you can assume there is oil in the entire thickness (gross = net). The average porosity is 10%, average water saturation is 20% and the oil formation volume factor is 1.3 RB/Stb. Other reservoirs with similar properties have drainage areas of 40 acres and the recovery factor 10.47305% (it is known with extreme precision!) a) Compute STOIIP and ultimate recovery, using the formals presented in lecture b) This well will also have a gas oil ratio (GOR) of 800 scf/bbl, how much gas is expected to be produced from this well?
It is the first of October, and you are developing cost estimates for creating an engineering consulting business with a small group of friends. Liability insurance beginning January 1 will cost $475 per month, payable at the beginning of each month. What is the PW of this insurance for the first year as of this date? The firm’s MARR is a 12% nominal annuity rate. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Nationwide income from monthly sales data (rounded to the nearest $100,000) of Stay Flat vacuum hold-down tables for last year was collected. Estimate the expected value of monthly income if economic conditions remain the same. Income, $/Month Number of Months 500,000 4 600,000 2 700,000 1 800,000 2 900,000 3
Show complete solutiion. Do not use excel. Manual Method. Steel drums manufacturer incurs a yearly operating cost of P 200,000. Each drum manufactured cost P 160 and sells for P 300. A machine use for the production has a first cost of P 20,000 and a salvage value of P 2,000 after producing 1,000 units. What is the break even number of units per year?
The company PT. Surya Kencana requires raw materials of 50,000 kg per year,with a purchase price per kg of Rp. 50, -. Storage fee per kg per year of 20%of raw materials per kg. Order fee (every time you place an order) of Rp.10.000, -, Safety Stock is determined equal to material requirement for 15 days and lead timefor 10 days.Based on the data above, you are asked to:a. Calculate Economic Order Quantity (EOQ)b. The frequency of purchases for one year.c. Determine the Re-order Point, if one year operates 360 days.