OPERATIONS AND SUPPLY CHAIN MANAGEMENT
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
9th Edition
ISBN: 9781119448037
Author: Russell
Publisher: WILEY
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Chapter 6, Problem 5P

Patricia Zell, a dollmaker from Olney, Maryland, is interested in the mass marketing and production of a ceramic doll of her own design called Tiny Trisha. The initial investment required for plant and equipment is estimated at $25,000. Labor and material costs are approximately $10 per doll. If the dolls can be sold for $50 each, what volume of demand is necessary for the Tiny Trisha doll to break even?

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Patricia Zell, a dollmaker from Olney, Maryland, is inter-ested in the mass marketing and production of a ceramic doll of her own design called Tiny Trisha. The initial investmentrequired for plant and equipment is estimated at $25,000.Labor and material costs are approximately $10 per doll. Ifthe dolls can be sold for $50 each, what volume of demandis necessary for the Tiny Trisha doll to break even?
6.5. Patricia Zell, a dollmaker from Olney, Maryland, is interested in the mass marketing and production of a ceramic doll of her own design called Tiny Trisha. The initial investment required for plant and equipment is estimated at $25,000. Labor and material costs are approximately $10 per doll. If the dolls can be sold for $50 each, what volume of demand is necessary for the Tiny Trisha doll to break even?
Prevar Corporation currently purchases components from one of its suppliers. The current purchase price is $1500 per component, with annual purchase volume of 750 units. The ops manager believes that this component could be made inhouse with some minor modifications to the current factory set up. Fixed cost for dedicating a line for this component is estimated at $50,000. Raw materials for the component is estimated at $900, overhead at $200 and it would take 10 hours of labor (at $20 per hour) to produce each component.

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OPERATIONS AND SUPPLY CHAIN MANAGEMENT

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