OPERATIONS MANAGEMENT LL PACKAGE
11th Edition
ISBN: 9781323592632
Author: KRAJEWSKI
Publisher: Pearson Custom Publishing
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Chapter 2, Problem 2P
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $50,000 per year and variable costs of $700 per unit. The second process has fixed costs of $400,000 but has variable costs of only $200 per unit.
- What is the break-even quantity beyond which the second process becomes more attractive than the first?
- If the expected annual sales for the product is 800 units, which process would you choose?
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Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive, with fixed costs of only $50,000 per year and variable costs of $700 per unit. The second process has fixed costs of $400,000 but has variable costs of only $200 per unit.a. What is the break-even quantity beyond which the second process becomes more attractive than the first?b. If the expected annual sales for the product is 800 units, which process would you choose?
two different manufacturing processes are being considered for making a new product. the first process is less capital intensive, with fixed costs of only $50,000 per year and variable costs of $700 per unit. the second process has fixed costs of $400,00 but has variable costs of only $200 per unit
a. what is the break even quantity beyond which the second process becomes more attractive than the first?
b. if the expected annual sales for the product is 800 units, which process would you choose?
Two manufacturing processes are being considered for making a new product. Process A is less capital intensive, with fixed costs of $60,000 per year and variable costs of $700 per unit. Process B has fixed costs of $400,000 annually, with variable costs of $300 per unit.
What is the break-even quantity for the two processes? If annual sales are expected to be 700 units, which process should be selected?
Operations and Engineering have found a way to reduce the cost of Process B, such that the fixed costs for this process decrease from $400,000 to $300,000 annually. All other costs remain the same. Does this change the process selection for the annual sales volume of 700 units?
Chapter 2 Solutions
OPERATIONS MANAGEMENT LL PACKAGE
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Process selection and facility layout; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=wjxS79880MM;License: Standard YouTube License, CC-BY