Concept explainers
a)
To determine: The utilization and efficiency rate for the given scenario.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
b)
To determine: The utilization and efficiency for the given scenario.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
c)
To determine: Whether the given statement is true.
Introduction: Utilization refers to the effective use of the resource or the supply. It is the action of practically using the available materials. Efficiency is the action of usefully performing the work with quality and in a well-organized manner.
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OPERATIONS MANAGEMENT W/ CNCT+
- A Polish company manufactures a technically advanced special detail. The selling price for this detail is 300 €. The company can produce max. 12,000 units of detail per month.Last month, the company had a capacity utilization of 68% and a total cost of € 1,380,000. This month, the company was able to increase its utilization rate to 90%. The total costs then amounted to € 1,520,000.a) Determine the company's cost function, including their total fixed costs and variable costs per unit. b) Calculate the company's critical volume. c) Calculate the company's utilization rate at the critical volume. d) The forecast for next month shows a utilization rate of 92%. How big will then be (i) the total gross margin (4 p) and (ii) the company's profitarrow_forwardHoosier Manufacturing operates a production shop that is designed to have the lowest unit production cost at an output rate of 175 units per hour. In the month of July, the company operated the production line for a total of 325 hours and produced 39,400 units of output. What was its capacity utilization rate for the month?arrow_forwardMariah Enterprises makes a variety of consumer electronicproducts. Its camera manufacturing plant is consideringchoosing between two different processes, named Alphaand Beta, which can be used to make two component partsA and B. To make the correct decision, the managers wouldlike to compare the labor and multifactor productivity ofprocess Alpha with that of process Beta. The value of processoutput for component A and B are $175 and $140 per unit,respectively. The corresponding overhead costs are $6,000and $5,000, respectively Process Alpha Process BetaProduct A B A BOutput (units) 50 60 30 80Labor ($) $1,200 $1,400 $1,000 $2,000Material ($) $2,500 $3,000 $1,400 $3,500a. Which process, Alpha or Beta, is more productive?b. What conclusions can you draw from your analysis?arrow_forward
- A seed company has a design capacity of 80 metric tonnes per day. It's effective capacity, However, is 64metric tonnes per day, and it's actual output is 62 metric tonnes per day. The operations manager would like to increase the number of Metric tonnes per day. Which of the following factors would you recommend that the operations manager investigate: quality problems, absenteeism, or scheduling?arrow_forward31 please help me please!A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 19,200 units output each month. However, it has an absolute maximum output capability of 23,000 units per month, and can produce as little 7,000 units per month without corporate headquarters shifting production to another plant. If the factory produces 13,280 units ir October, what is the capacity utilization rate in October for this factory? Note: Round your answer to 1 decimal place.arrow_forwardA manufacturing shop is designed to operate most efi ciently at an output of 550 units per day. In the past month the plant produced 490 units. What was its capacity utilization rate last month?arrow_forward
- A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine CostA $40,000B $30,000C $80,000Product forecasts and processing times on the machines are as follows: Processing Time per Unit (minutes) Product Annual Demand A B C 1 16000 3 4 2 2 12000 4 4 3 3 6000 5 6 4 4 30000 2 2 1 a.) Assume that machines operate 10 hours a day, 250 days a year. If we only consider purchasing costs, which machine would have the lowest total cost? b.) Assume machines operate 10 hours a day, 250 days a year. If we select machine A, how many machine A do we need? (Use common sense to decide the answer.)arrow_forwardCairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 249,000 units. The facility has a practical capacity of 264,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 66,000 units each. The annual cost of the facility is $1,013,760. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. What is the cost of excess capacity? cost per unit cost of excess capacityarrow_forward126) please help me with this please!!!!! A manufacturing shop is designed to operate most efficiently at an output of 1,070 units per day. In the past month, the plant averaged 840 units per day. What was its capacity utilization rate last month? Note: Round your answer to 1 decimal place.arrow_forward
- Explain what is the process of determining expected output in operations ?arrow_forwardA manufacturer of printed circuit boards has a design capacity of 1,000 boards per day. The effective capacity, however, is 693 boards per day. Recently, the production facility has been producing 964 boards per day. Compute the design and effective capacity utilization measures. (Round your answers to 1 decimal place, e.g. 3.5%.) Utilization Effective = enter utilization in percentages rounded to 1 decimal place %, Utilization Design = enter utilization in percentages rounded to 1 decimal place %arrow_forwardExplain and discuss business examples of overcapacity and under capacity ?arrow_forward
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