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A company supplies several types of Ice-cream to consumer market. It has two plants. The data of year 2022 for both plants are given as follows Labor cost Material cost Energy cost Unit produced Plant-1 $10,000 $5,000 $2,000 50000 Quality rate 90% Average Selling price $5/unit Plant-2 $7,000 $7,000 $3,000 40000 95% $7/unit For year-2023, company decided to make an additional investment of $3,000 which would potentially improve the quality rate by 4% in plant-1 and 2% in plant-2. For budget limitation they can only invest in any one of the plants. Management decided to invest where multifactor productivity improvement will be higher compared to year-2022. Perform your analysis and suggest where management should invest the amount. (You may use MS Excel to perform the calculation.)

A company supplies several types of Ice-cream to consumer market. It has two plants. The data of year 2022 for both plants are given as follows Labor cost Material cost Energy cost Unit produced Plant-1 $10,000 $5,000 $2,000 50000 Quality rate 90% Average Selling price $5/unit Plant-2 $7,000 $7,000 $3,000 40000 95% $7/unit For year-2023, company decided to make an additional investment of $3,000 which would potentially improve the quality rate by 4% in plant-1 and 2% in plant-2. For budget limitation they can only invest in any one of the plants. Management decided to invest where multifactor productivity improvement will be higher compared to year-2022. Perform your analysis and suggest where management should invest the amount. (You may use MS Excel to perform the calculation.)

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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Question-1: A company supplies several types of Ice-cream to consumer market. It has two plants. The data of year 2022 for both plants are given as follows Plant-1 $10,000 $5,000 $2,000 50000 Quality rate 90% Average Selling price $5/unit Labor cost Material cost Energy cost Unit produced Plant-2 $7,000 $7,000 $3,000 40000 95% $7/unit For year-2023, company decided to make an additional investment of $3,000 which would potentially improve the quality rate by 4% in plant-1 and 2% in plant-2. For budget limitation they can only invest in any one of the plants. Management decided to invest where multifactor productivity improvement will be higher compared to year-2022. Perform your analysis and suggest where management should invest the amount. (You may use MS Excel to perform the calculation.)
Transcribed Image Text:Question-1: A company supplies several types of Ice-cream to consumer market. It has two plants. The data of year 2022 for both plants are given as follows Plant-1 $10,000 $5,000 $2,000 50000 Quality rate 90% Average Selling price $5/unit Labor cost Material cost Energy cost Unit produced Plant-2 $7,000 $7,000 $3,000 40000 95% $7/unit For year-2023, company decided to make an additional investment of $3,000 which would potentially improve the quality rate by 4% in plant-1 and 2% in plant-2. For budget limitation they can only invest in any one of the plants. Management decided to invest where multifactor productivity improvement will be higher compared to year-2022. Perform your analysis and suggest where management should invest the amount. (You may use MS Excel to perform the calculation.)
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