SUO_MGT3059 W3 L3 Capacity Cost Concerns

pdf

School

Independence University *

*We aren’t endorsed by this school

Course

3059

Subject

Management

Date

Nov 24, 2024

Type

pdf

Pages

1

Uploaded by BailiffMusicMongoose34

Report
Capacity Cost Concerns If We Build It, Will They Come? When considering an expansion to the production system, an operations manager must justify the investment in the operations of the organization. This can be done through a break-even analysis that determines the number of units or dollars the production system must produce to cover the production costs. Another alternative to a break-even analysis is to use a decision tree to estimate the impact of several options. Decision trees use the probability that an option (branch) will happen. You then choose the branch that is expected to be the most profitable for the organization. Finally, many organizations use a net present value (NPV) calculation to estimate the financial impact on the organization. This takes all monetary flows (costs and revenues), and converts them to what their value is today. Then, it can be determined whether or not the current (present) values of the revenues outweigh the current (present) values of the costs. No matter what approach is taken, the operations manager must find the alternative that will meet the capacity needs for the future with the minimum financial impact on the organization. This is one of the many balancing acts that operations managers must master within their jobs. © 2017 South University
Discover more documents: Sign up today!
Unlock a world of knowledge! Explore tailored content for a richer learning experience. Here's what you'll get:
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help

Related Documents

Organizational Behavior Analysis.pptx
Modern Project Management - Case Study 2.docx
IMG-20231112-WA0023.jpg
FINRA SIE FINAL STUDY GUIDE 2023 QUESTIONS AND ANSWERS CORRECT AND VERIFIED-15.pdf
Kaggle dataset (1232).docx
How can services be upscaled while contending with other organizations in the same communities.docx
David Attia - Copy of 3. Resume Brainstorming.docx
Global Talent Management.docx
Case Study of Conifer Corporation.doc
Manage personal and professional development.edited.docx
Updated health and safety policy and procedures.pdf
MGT305 Week 6 Quiz.docx
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
SEE MORE TEXTBOOKS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
SEE MORE TEXTBOOKS