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A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. The operation manager of the firm has identified and calculated the cost for three feasible production process alternatives. The fixed cost and the variable cost of the three production processes are listed below. Process A Process B Process C Fixed Cost $35,000 $80,000 $45,600 Variable Cost $39 $23 $32 ( a) Determine all the crossover points. (b ) Identify the output ranges where each production process should be used. (c) If the firm adopts Process B to manufacture 3350 units of the product, what is the minimum selling price the firm should set for the product in order not to incur a loss (assume all 3350 units can be sold)?

A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. The operation manager of the firm has identified and calculated the cost for three feasible production process alternatives. The fixed cost and the variable cost of the three production processes are listed below. Process A Process B Process C Fixed Cost $35,000 $80,000 $45,600 Variable Cost $39 $23 $32 ( a) Determine all the crossover points. (b ) Identify the output ranges where each production process should be used. (c) If the firm adopts Process B to manufacture 3350 units of the product, what is the minimum selling price the firm should set for the product in order not to incur a loss (assume all 3350 units can be sold)?

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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A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. The operation manager of the firm has identified and calculated the cost for three feasible production process alternatives. The fixed cost and the variable cost of the three production processes are listed below. Process A Process B Process C Fixed Cost $35,000 $80,000 $45,600 Variable Cost $39 $23 $32 ( a) Determine all the crossover points. (b ) Identify the output ranges where each production process should be used. (c) If the firm adopts Process B to manufacture 3350 units of the product, what is the minimum selling price the firm should set for the product in order not to incur a loss (assume all 3350 units can be sold)?
Transcribed Image Text:A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. The operation manager of the firm has identified and calculated the cost for three feasible production process alternatives. The fixed cost and the variable cost of the three production processes are listed below. Process A Process B Process C Fixed Cost $35,000 $80,000 $45,600 Variable Cost $39 $23 $32 ( a) Determine all the crossover points. (b ) Identify the output ranges where each production process should be used. (c) If the firm adopts Process B to manufacture 3350 units of the product, what is the minimum selling price the firm should set for the product in order not to incur a loss (assume all 3350 units can be sold)?
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