Breakeven Analysis 1. The annual maintenance cost of a machine shop is P 69,994. If the cost of making the forging is P 56 per unit and its selling price is P 135 per forged unit, find the number of units to be forged to break even.
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- The annual maintenance cost of a machine shop is P 69,994. If the cost of making the forging is P 56 per unit and its selling price is P 135 per forged unit, find the number of units to be forged to break evenRBMC Industry manufactures a special printing according to customer specifications with respect to the number of sheets the machine can produce per hour. With this, there is a $50 increase in the production rate x. A shop owner is considering buying one of these machines. From his past experiences, the owner estimates that the arrival rate is three per hour and each order averages 500 sheets. Contracts signed by the owner, and the customer says that there will be a penalty of 10$ per late order per hour. It is assumed that the actual production time is exponential. (a) Formulate the cost model as a function of the production rate x. (b) Determine the optimal production rate the owner should specify in his purchase of the machine from RBMC. Hint: Get the derivative of the cost function.Dennis Odle is the production vice president of Century Electrics Company, a very large manufacturer of printers for computer systems. Each printer uses a fractional horsepower electric motor drive mechanism. Dennis has estimated that the cost of being out of stock for this particular motor is P1,300 for each unit Century is short while the carrying cost for each stock is P650. Using an EOQ model, Dennis has already calculated that the economic order quantity of this motor is 7,200 with an average usage of 60 motors a day. The normal lead time is 10 days. a.How many alternatives for the number of the safety stock do we have? for continuous question:If 0 being the first alternative of the Safety Stock and the highest alternative being the last... b.What is the total annual stockout cost of the first alternative? c.What is the total annual safety stock cost of the last alternative? d.What is the ROP (Lead time demand + Safety stock)?
- The cost of making a small transistor radio is 23.00 php in labor costs and 37.00 php in material costs. The fixed cost of running the system is P 100,000.00 per month. The variable cost is P1.00 per set. The price of the radio is php75.00 each. Determine how many sets must be produced each month in order to break even.An item which can be sold for P63.00 per unit wholesale is being produced with the following cost data; labor cost, P10 per unit; material cost, P15.00 per unit; fixed charges, P10,000.00; variable cost, P8.00 per unit. What is the break-even sales volume if two out of every 10 units produced is defective and is rejected with only full recovery materials?The Wellbuilt Company produces two types of wood chippers, economy and deluxe. The deluxe model requires 3 hours to assemble and 12 hour to paint, and the economy model requires 2 hours to assemble and 1 hour to paint. The maximum number of assembly hours available is 24 per day, and the maximum number of painting hours available is 8 per day. If the profit on the deluxe model is $92 per unit and the profit on the economy model is $74 per unit, how many units of each model will maximize profit?
- The management of First American Bank was concerned about the potential loss that might occur in the event of a physical catastrophe such as a power failure or a fire. The bank estimated that the loss from one of these incidents could be as much as $100 million, including losses due to interrupted service and customer relations. One project the bank is considering is the installation of an emergency power generator at its operations headquarters. The cost of the emergency generator is $800,000, and if it is installed, no losses from this type of incident will be incurred. However, if the generator is not installed, there is a 10% chance that a power outage will occur during the next year. If there is an outage, there is a .05 probability that the resulting losses will be very large, or approximately $80 million in lost earnings. Alternatively, it is estimated that there is a .95 probability of only slight losses of around $1 million. Using decision tree analysis, determine whether the…JRT Motors Inc. has been shipping its Suzuki engines in containers to avoid the necessary crating of the engines. JRT Motors Inc. will pay freight on container load of 40 tons, regardless of whether or not the container is completely filled with engines. Record shows that due to engine size, JRT Motors Inc. has shipped only 30 tons per container. Freight of container cost $3.00 per kilograms. If the engines are created so that they can be shipped at the rate of $3.50 per hundred kilograms with the freight bill computed only on the actual weight shipped. The cost of crating would be $50 per engine and would increase the shipping weight from 1500 kg to 1520 kg per engine. How much more economical shipping the engine in crates than in containers? Should JRT Motors Inc. ship the engines in crates or in containers?The economic analysis division of Mapco Enterprises has estimated the demand function for its line of weed trimmers as QD = 18,000 + 0.4N − 350PM + 90Ps whereN = number of new homes completed in the primary market area PM = price of the Mapco trimmer PS = price of its competitor’s Surefire trimmer In 2010, 15,000 new homes are expected to be completed in the primary market area. Mapco plans to charge $50 for its trimmer. The Surefire trimmer is expected to sell for $55. a. What sales are forecasted for 2010 under these conditions? b. If its competitor cuts the price of the Surefire trimmer to $50, what effect will this have on Mapco’s sales?c. What effect would a 30 percent reduction in the number of new homes completed have on Mapco’s sales (ignore the impact of the price cut of the Surefire trimmer)?
- Solve Q6 all the three sub-parLUML has just received an order for 500 fixtures. LUML has decided to accept the order. These will be produced under lot 2022-12 (order number 12 for 2022). There has been some concern recently about the ability to identify problems in production. At the end of the production process, before packing each fixture is inspected by a person from the “quality control office”. For Lot 2022-12, arrangements have been made to record any problem units that the inspection finds. The nature of the problem will also be recorded. (Somewhat surprisingly, keeping track has not been done before.) They expect that the units will be produced in a run that should last about a week. Once the run has been completed, the data on problem units will be sent to you. You are to run an analysis and summarize your results. Some detailed questions will be developed and sent over to you. And you can use your own expertise to develop any other work that you think would be useful. The expected production run is the…You manufacture ceramic lawn ornaments. After several months your accountant tells you that your profit P(n) can be modeled by the function P(n)= -0.002n^2+5.2n-1208 where n is number of ornaments sold each month. A) How many ornaments must you make and sell to break even. B) How many ornaments must you make and sell to maximize profit. C) What is the maximum profit. D) How many ornaments must you make and sell in order to earn a profit of $1657.