Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
12th Edition
ISBN: 9780134742205
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 5P
Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $350,000 of fixed cost and add $50 of variable cost to each casting Spartan produces. The second process has fixed costs of $150,000 and adds $90 of variable cost per casting.
- What is the break-even quantity beyond which the first process is more attractive?
- What is the difference in total cost if the quantity produced is 10,000?
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Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $340,000 of fixed cost and add
$40 of variable cost to each casting Spartan produces. The second process has fixed costs of $100,000 and adds $70 of variable cost per casting.
a. What is the break-even quantity beyond which the first process is more attractive?
The break-even quantity is 8000 castings.
b. What is the difference in total cost if the quantity produced is
5,000?
The total cost of process 1 is greater. Find the difference in total cost?
Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $350,000 of fixed cost and add $50 of variable cost to each casting Spartan produces. The second process has fixed costs of $150,000 and adds $90 of variable cost per casting.a. What is the break-even quantity beyond which the first process is more attractive?b. What is the difference in total cost if the quantity produced is 10,000?
Does the process optimise the desired demand of the customer?
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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