could you explain easily? offer price concessions in order to attract larger orders. The pricestructure is shown below.a) What is the optimal order quantity and the minimum cost for BellComputers to order, purchase, and hoid these integrated chips?Rich Blue Chip's Price StructureQuantity PurchasedPrice/Unit$350$325$3001-99 units100-199 units200 or more unitsb) Bell Computers wishes to use a 10% holding cost rather than thefixed $35 holding cost in part a. What is the optimal order quan-tity, and what is the optimal cost? 12.20 Bel Computers purchases integrated chips at $350 perchip. The holding cost is $35 per unit per year, the ordering cost is$120 per order, and sales are steady, at 400 per month. The com-pany's supplier, Rich Blue Chip Manufacturing, Inc., decides to

Given: To calculate the optimal order quantity, minimal cost and the optimal cost as,

Answered: r quantity and the minimum co chase,…

Business

Accounting

r quantity and the minimum co chase, and hold these integrated Price Structure

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

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Prepare and present a computation which illustrates what price should be selected in order to maximize profits when The company is considering the launch of a new product, component TDX 489 with the following information: Standard cost per box Variable cost 6,20 fixed cost 1,60 Total 7,80 Market research forecast of demand Selling price 13 12 11 10 9 Demand box 5000 6000 7200 11200 13400 The company only has enough production capacity to make 7000 boxes. However, it would be possible to purchase product TDX 489 from a subcontractor at £7.75 per box for orders up to 5000 boxes and £7 per box if the orders exceed 5000 boxes.
AcerWare Inc. manufactures external hard disks for $32 per unit, and the maximum price customers are willing to pay is $47 per unit. Data Driver Inc. is a competitor of AcerWare Inc. that produces external hard disks for $37 per unit, and customers are willing to pay a maximum price of $50 per unit. What does this imply? Multiple Choice AcerWare and Data Driver share differentiation parity. Data Driver has a competitive advantage over AcerWare in terms of perceived value. AcerWare creates a greater economic value than Data Driver. Data Driver is a cost-leader when compared to AcerWare.
The following problem is designed to be solved by spreadsheet. Suppose the supplier of keyboards is willing to offer the following incremental quantity discount schedule: Determine the cost to the firm for order quantities in increments of 20,000for Q = 200,000 to Q = 1,000,000, and compare that to the cost to the firm ofproducing internally for these same values of Q. What is the break-even orderquantity?
he Holtz Company manufactures a varietyof electronic printed circuit boards (PCBs) thatgo into cellular phones. The company has justreceived an offer from an outside supplier to provide the electrical soldering for Holtz’s Motorolaproduct line (Z-7 PCB, slimline). The quoted priceis $4.80 per unit. Holtz is interested in this offer,since its own soldering operation of the PCB is atits peak capacity.• Outsourcing option: The company estimatesthat if the supplier’s offer were accepted, thedirect labor and variable overhead costs of the Z-7slimline would be reduced by 15%, and the directmaterial cost would be reduced by 20%.• In-house production option: Under the presentoperations, Holtz manufactures all of its own PCBsfrom start to finish. The Z-7 slimlines are soldthrough Motorola at $20 per unit. Fixed overheadcharges to the Z-7 slimline total $20,000 each year.The further breakdown of producing one unit isDirect materials $7.50Direct labor $5.00Manufacturing overhead $4.00Total cost…
What are the important EOQ assumptions and comment if theseassumptions are realistic in a real-world situation. (c) CalcCo is a manufacturer of calculators, currently producing 200 perweek. One component for every calculator is a liquid crystal display(LCD), which the company purchases from LCDCo for £1 per LCD.CalcCo management wants to avoid any shortage of LCDs, since thiswould disrupt production, so LCDCo guarantees a delivery time of 0.5weeks on each order. The placement of each order is estimated torequire 1 hour of clerical time, with a direct cost of £15 per hour plusoverhead costs of another £5 per hour.What should be the Economic Order Quantity (EOQ), the reorder point(assume no safety stock) and the TC? To ensure production continuityCalcCo determined that the standard deviation of the lead timedemand is 20 LCDs. To ensure a 90% confidence of productioncontinuity the company has decided to introduce a safety stock. Whatis this stock and re-calculate the order point.(d)…
1) Brandon Production is a small firm focused on the assembly and sale of custom computers. The firm is facing stiff competition from low-priced alternatives, and is looking at various solutions to remain competitive and profitable. Current financials for the firm are shown in the table below. In the first option, marketing will increase sales (and costs) by 50%. The next option is Vendor (Supplier) changes, which would result in a decrease of 12% in the cost of inputs. Finally, there is an OM option, which would reduce production costs by 25%. Which of the options would you recommend to the firm if it can only pursue one option? In addition, comment on the feasibility of each option. Business Function Current Value Cost of Inputs $50,000 Production Costs $30,000 Revenue $83,000
JW Computers is a small firm focused on the assembly and sale of custom computers. The firm is facing stiff competition from low-priced alternatives, and is looking at various solutions to remain competitive and profitable. Current financials for the firm are shown in the table below. In the 1st option, marketing will increase sales by 50%. The 2nd option is Vendor (Supplier) changes, which would result in a decrease of 10% in the cost of inputs. Finally, there is the 3rd OM option, which would reduce production costs by 25%. a. Which of the 3 options would you recommend to the firm if it can only pursue one option? b. What is the new profit for the 1st option? c. What is the new profit for the 2nd option?
The Can Division of Sheffield Corp. manufactures and sells recyclable containers externally for $0.97 per container. Its unit variable costs and unit fixed costs are $0.24 and $0.11, respectively. The Packaging Division wants to purchase 50,000 containers at $0.36 per unit. Selling internally will save $0.02 a container.Assuming that the Can Division has sufficient capacity, what is the minimum transfer price it should accept? a.$0.24 b.$0.36 c.$0.34 d.$0.22
The clock division of Control Central Corporation manufactures clocks and then sells them to customers for $10 per unit. Its variable cost is $4 per unit, and its fixed cost per unit is $2.50. Management would like the clock division to transfer 8.000 of these clocks to another division within the company at a price of $5. The clock division could avoid $0.50 per clock variable packaging costs by selling internally. Required:a. Determine the minimum transfer price, assuming the clock division is not operating at full capacity and what is your interpretation of these results?b. Determine the minimum transfer price, assuming the clock division is operating at full capacity and what is your interpretation of these results?c. Why transfer pricing policy can be interpreted negatively and positively? Give an explanation!
Tesla’s decision to produce a new line of compact and full sized cars resulted in the need to construct either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars: Long Run Demand Plant size Low Medium High Small 80 200 350 Large 120 180 190 Construct an influence diagram. Construct a decision tree. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches.
Techno Ltd manufactures components for laptop computers. One of its top selling products is the new solid-state drive, the Solix, which will offer improved speed and performance. Earlier this year, a Taiwanese company entered the market offering a similar drive at a price 10% below the Solix price of $400 per unit. Techno Ltd is currently achieving its target profit margin of 30% on all of its products. Required: 1. What target cost would have to be set for the Solix drive to remain competitive and meet the requirements of the company’s target profit margin? 2. Calculate the cost reduction objective. 3. Outline two cost management techniques Techno Ltd could apply to achieve the cost reduction objective.
Assume Apple is designing a new smartphone. Each unit of this new phone is expected to require $230 of direct materials, $10 of direct labor, $20 of variable overhead, and $20 of variable selling and administrative costs. Required 1. If Apple uses the variable cost method to set selling prices and plans a markup of 200% of variable costs, what is the expected selling price per unit of this new phone? 2. Assume that Apple is a “price taker” and the market sales price for this type of phone is $800 per unit. Compute Apple’s target cost if the company desires a profit of 60% of sales price.