What is the correct formula to use to compare these options? Which options would be best for: I. 10,000 units? ii. 20,000 units? iii. 100,000 units? What is the value in considering these options across three very different demand values ranging from 10,000 to 100,000 units?
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At Fraser engineering. Erix is trying to decide whether to purchase a certain part to to have it produced internally. Internal production could use either of two processes. One would entail a variable cost per unit of $17, and an annual fixed cost of $240,000. Three vendors are willing to provide the part.
Vendor A has a price of $20 per-unit for any volume up to 30,000 units
Vendor B has a price of $22 per-unit for demand of 1,000 units or less, and $18 per-unit for larger quantities.
Vendor C offers a price of $21 per-unit for the first 1,000 units, and $19 for each additional unit.
What is the correct formula to use to compare these options?
Which options would be best for:
I. 10,000 units?
ii. 20,000 units?
iii. 100,000 units?
What is the value in considering these options across three very different demand values ranging from 10,000 to 100,000 units?
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- A manager is trying to decide whether to purchase a certain part or to have it produced internally Internal production could use either of two processes. One would entail a variable cost of $17 per unit and an annual fixed cost of $200,000, the other would entail a variable cost of $14 per unit and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volume up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor Coffers a price of $21 per unit for the first 1,000 units, and $19 per unit for additional units a. If the manager anticipates an annual volume of 10,000 units, which alternative would be best from a cost standpoint?" For 20,000 units, which alternative would be best" b. Determine the range for which each alternative is best. Are there any alternatives that are never best? Which?A manager is trying to decide whether to purchase a certain part or to have it produced internally.Internal production could use either of two processes. One would entail a variable cost of $17 perunit and an annual fixed cost of $200,000; the other would entail a variable cost of $14 per unitand an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A hasa price of $20 per unit for any volume up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor C offers a price of$21 per unit for the first 1,000 units, and $19 per unit for additional units.a. If the manager anticipates an annual volume of 10,000 units, which alternative would be bestfrom a cost standpoint? For 20,000 units, which alternative would be best?A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $12 per hour per employee. Each employee identifies an average of 3,400 potential leads a week from a list of 4,800. An average of 7 percent of potential leads actually sign up for the service, paying a one-time fee of $90. Material costs are $1,400 per week, and overhead costs are $8,900 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Round your answer to 2 decimal places.) Do you have any suggestions for increasing the productivity of the three employees or for this task?
- Yost-Perry Industries’ (YPI) senior management team wants to improve the profitability of the firm by accepting the right set of orders. Currently, decisions are made using the traditional method, which is to accept as much of the highest contribution margin product as possible (up to the limit of its demand), followed by the next highest contribution margin product, and so on until all available capacity is utilized. Because the firm cannot satisfy all the demand, the product mix must be chosen carefully. Jay Perry, the newly promoted production supervisor, is knowledgeable about the TOC and the bottleneck-based method for scheduling. He believes that profitability can indeed be improved if bottleneck resourcesare exploited to determine the product mix. What is the change in profits if, instead of the traditional method that YPI has used thus far, the bottleneck method advocated by Jay is used for selecting the product mix?A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $12 per hour per employee. Each employee identifies an average of 3,400 potential leads a week from a list of 4,600. An average of 6 percent of potential leads actually sign up for the service, paying a one-time fee of $80. Material costs are $1,500 per week, and overhead costs are $9,300 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input.Georgetown Pizza makes its favorite pan pizzas every day with three working shifts around the clock. The current completely cooked pizza-making process has a fixed cost of $24,000, and a variable cost of $2.75 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked and selling at $13.98 per unit, or partially cooked with a selling price of $12.98 per unit. This alternate process has a fixed cost of $28,000, but a lower variable cost (because much less energy is used in baking) of $2.25 per pizza. a. Determine the breakeven quantity between the current pizza-making process and the alternate process.
- Tribal Systems, Inc., is opening a new plant and has yet todecide on the type of process to employ. A labor-intensiveprocess would cost $10,000 for tools and equipment and $14 for labor and materials per item produced. A more au-tomated process costs $50,000 in plant and equipment but has a labor/material cost of $8 per item produced. A fullyautomated process costs $300,000 for plant and equipmentand $2 per item produced. If process selection were basedsolely on lowest cost, for what range of production wouldeach process be chosen?Georgetown Pizza makes favorite pan pizzas every day with three working shifts around the clock. The current completely cooked pizza making process has a fixed cost of $24,000, and a variable cost of $2.75 per pizza. The owner is considering a different process that can make pizzas in two ways: completely cooked and selling at $13.98 per unit, or partially cooked with a selling price of $12.98 per unit. This alternate process has a fixed cost of $28,000, but a lower variable cost (because much less energy is used in baking) of $2.25 per pizzac. If the owner expects to get $390,000 as a half year profit, how many units of completely cook pizzas, should Georgetown sell a year using the current pizza making process? d. Determine the annual design capacity for Georgetown’s production if the completely cook pizzas can be produced at 120 units per hour.A manager is in a dilemma whether to purchase boards for kitchen cabinets from a vendor at $6 each or to produce them in-house. For In-house production there are two processes the first option has annual fixed cost of $150,000 and variable cost of $4 per unit, while the other has annual fixed cost of $1 80,000 and variable cost of S4 per unit. Determine the volume that would be best for each of them.
- For the four basic configurations that follow, assume that the market is demanding product that must be processed by both Resource X and Resource Y for Cases I, II, and III. For Case IV, both resources supply separate but dependent markets; that is, the number of units of output from both X and Y must be equal. Plans are being made to produce a product that requires 40 minutes on Resource X and 30 minutes on Resource Y. Assume that there is only one of each of these resources and that market demand is 1,500 units per month. The only one I got right was B Case I :(Product A has a fixed cost of $5,000 and a variable cost of $5 per unit, it can sell for $20 per unit. Product B has a fixed cost of $8,000 and a variable cost of $9 per unit, it can sell for $30 per unit. Company plans to produce 381 units of either A or B. Which product should be produced?Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $350,000 of fixed cost and add $50 of variable cost to each casting Spartan produces. The second process has fixed costs of $150,000 and adds $90 of variable cost per casting.a. What is the break-even quantity beyond which the first process is more attractive?b. What is the difference in total cost if the quantity produced is 10,000?