Use Excel to make calculations Given the following sales data: Quarter Year 1 Year 2 1 120 150 2 160 200 3 210 250 4 130 170 Compute the seasonal index for each quarter and forecast quarterly demand for year 3 with a projected annual demand of 1000. The efficiency of a production unit is 70 percent. The unit produces an average of 100 products per day. Determine the effective capacity of the unit. The utilization of a machine is 60 percent. The machine has a design capacity of 150 units per hour and an effective capacity of 100 units per hour. Find the efficiency of the machine. FloorsRUs is considering new locations for its manufacturing plants. Costs for constructing a new facility in Huntsville are $1,100,000 and the company estimates that for every product from its new line, there would be an additional cost of $3. If the company were to locate in Hays, the new facility would cost $1,800,000 and each product would incur a $2 incremental cost. The company plans to sell the products to retailers for $7. What is the break-even point for each location? At what volume is the point of indifference? At what forecasted volumes should FloorsRUs select Huntsville as their new manufacturing location and what volumes should the company select Hays and why?

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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Use Excel to make calculations

Compute the seasonal index for each quarter and forecast quarterly demand for year 3 with a projected annual demand of 1000.

The efficiency of a production unit is 70 percent. The unit produces an average of 100 products per day. Determine the effective capacity of the unit.
The utilization of a machine is 60 percent. The machine has a design capacity of 150 units per hour and an effective capacity of 100 units per hour. Find the efficiency of the machine.
FloorsRUs is considering new locations for its manufacturing plants. Costs for constructing a new facility in Huntsville are $1,100,000 and the company estimates that for every product from its new line, there would be an additional cost of $3. If the company were to locate in Hays, the new facility would cost $1,800,000 and each product would incur a $2 incremental cost. The company plans to sell the products to retailers for $7.
1. What is the break-even point for each location?
2. At what volume is the point of indifference?
3. At what forecasted volumes should FloorsRUs select Huntsville as their new manufacturing location and what volumes should the company select Hays and why?

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