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4. C&A uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Each worker is paid $15 per hour. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Assume demand is unlimited. Answer the following questions. a. How much profit does C&A make per hour? b. What will be the impact on C&A's profit per hour if the processing time of step 2 is reduced to 10 seconds? c. Demand rate is 120 toys per hour. How much profit does C&A make per hour? Assume the worker's pay is a variable cost.

4. C&A uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Each worker is paid $15 per hour. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Assume demand is unlimited. Answer the following questions. a. How much profit does C&A make per hour? b. What will be the impact on C&A's profit per hour if the processing time of step 2 is reduced to 10 seconds? c. Demand rate is 120 toys per hour. How much profit does C&A make per hour? Assume the worker's pay is a variable cost.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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4. C&A uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Each worker is paid $15 per hour. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Assume demand is unlimited. Answer the following questions. a. How much profit does C&A make per hour? b. What will be the impact on C&A's profit per hour if the processing time of step 2 is reduced to 10 seconds? c. Demand rate is 120 toys per hour. How much profit does C&A make per hour? Assume the worker's pay is a variable cost. 5. You are a manager of CircuitTown, which sells Xbox2010. The demand for Xbox2010 in the holiday season is 200 units with probability 0.8 and 400 units with probability 0.2. You have to take an order from MSFT in advance. You can either purchase 200 units or 400 units. The purchase price is $150 per unit and the retail price is $300 per unit. After the holiday, you dump unsold units to leftover.com with a price of $50 per unit. Build a decision tree and decide how many units you want to order.
Transcribed Image Text:4. C&A uses two steps to make a toy. Step 1 takes 20 seconds. Step 2 takes 15 seconds. Each step is staffed by one worker, for a total of two workers. Each worker is paid $15 per hour. Each toy is sold for $20. Material costs are $5 per toy and fixed costs are $500 per hour. Assume demand is unlimited. Answer the following questions. a. How much profit does C&A make per hour? b. What will be the impact on C&A's profit per hour if the processing time of step 2 is reduced to 10 seconds? c. Demand rate is 120 toys per hour. How much profit does C&A make per hour? Assume the worker's pay is a variable cost. 5. You are a manager of CircuitTown, which sells Xbox2010. The demand for Xbox2010 in the holiday season is 200 units with probability 0.8 and 400 units with probability 0.2. You have to take an order from MSFT in advance. You can either purchase 200 units or 400 units. The purchase price is $150 per unit and the retail price is $300 per unit. After the holiday, you dump unsold units to leftover.com with a price of $50 per unit. Build a decision tree and decide how many units you want to order.
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