Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 10P
Summary Introduction
Interpretation: The decision of whether B should build or buy is to be made.
Concept Introduction:
After considering the facts and figures, the question requires to understand whether it is financially feasible to buy or generate electric power.
Since the question relates to an evaluation based on cost, the option (Buy or Generate) that is chosen should indicate a low cost compared to the other option.
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The operations manager for Mile-High Lemonade narrowed the search for a new facility location to seven communities. Annual fixed costs (land, property taxes, insurance, equipment, and buildings) and variable costs (labor, materials, transportation, and variable overhead) are shown in Table.a. Which of the communities can be eliminated from further consideration because they are dominated (both variable and fixed costs are higher) by another community?b. Plot the total cost curves for all remaining communities on a single graph. Identify on the graph the approximate range over which each community provides the lowest cost. c. Using break-even analysis, calculate the break-even quantities to determine the range over which each community provides the lowest cost.
A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below.
For which volume of business would the two locations be equally attractive (Hint: the crossover point)? Please show your work.
New Jersey
Delaware
Variable Costs ($ per unit)
_____
(Please pick a number from 11-20 and fill in the blank above. Use the number for your calculation.)
_____
(Please pick a number from 21-30 and fill in the blank above. Use the number for your calculation.)
Fixed Costs
$___________
(Please pick a number from 1,000,000-1,200,000 and fill in the blank above. Use the number for your calculation.)
$___________
(Please pick a number from 800,000-1,000,000 and fill in the blank above. Use the number for your calculation.)
A manufacturer must choose between locating in Dallas (fixed cost of $60,000 / year and variable cost of $28 per unit) or Denver (fixed cost of $80,000 / year and variable cost of $22 per unit. Revenue per unit is $35 in either location. The expected demand is 20,000 units in Dallas and 15,000 units in Denver.
___________ 3a) Which location would produce the greater profit?
___________ 3b) How much is that profit?
Chapter A Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. A - Mary Williams, owner of Williams Products, is...Ch. A - Prob. 2PCh. A - An interactive television service that costs $10...Ch. A - A restaurant is considering adding fresh brook...Ch. A - Spartan Castings must implement a manufacturing...Ch. A - A news clipping service is considering...Ch. A - Prob. 7PCh. A - Techno Corporation is currently manufacturing an...Ch. A - The Tri-County Generation and Transmission...Ch. A - Prob. 10P
Ch. A - Tri-County G&T sells 150,000 MWh per year of...Ch. A - The Forsite Company is screening three ideas for...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Janice Gould of Krebs Consulting is in the process...Ch. A - Build-Rite Construction has received favorable...Ch. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 20PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 24P
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