Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
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.

  1. What is the break-even quantity beyond which the first process is more attractive?
  2. What is the difference in total cost if the quantity produced is 10,000?

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​Yost-Perry Industries​ (YPI) manufactures a mix of affordable guitars​ (A, B,​ C) that are fabricated and assembled at four different processing stations​ (W, X,​ Y, Z). The operation is a batch process with small setup times that can be considered negligible. The product information​ (price, weekly​ demand, and processing​ times) and process sequences are shown below. Purchased parts and raw materials​ (shown as a​ per-unit consumption​ rate) are represented by inverted triangles. YPI is able to make and sell up to the limit of its demand per week with no penalties incurred for not meeting the full demand. Each workstation is staffed by one highly skilled worker who is dedicated to work on that workstation alone and is paid​ $15 per hour. The plant operates one​ 8-hour shift per day and operates on a​ 5-day work week​ (i.e., 40 hours of production per person per​ week). Overhead costs are​ $9,000/week.…
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