Chapter 3, Problem 1QTC

To determine

One year of production has value of $240 million. What is the value of one batch of product.

Answer to Problem 1QTC

So, value of one batch is 0.01 million.

Explanation of Solution

With the improvement in production process, the quality of product increases with less wastage and in less time.

It is given that the product yield was valued at $2.4 million per year when 240 batches are being produced.

Thus, if production value is increased to $240 million $\left(\text{\$ 2}\text{.4 million }\times \text{100}\right)$ then no. of batches would also increased to $\text{240}\times \text{100=24000}$

Hence, value of one batch = $\text{240/24000 = 0}\text{.01 million}$.