A manufacturing company is trying to minimize the total cost of production while maintaining aproduction level of 50,000 units per year. The fixed costs are $500,000, and the variable costs perunit are $15. However, the company is facing a potential 10% increase in variable costs due tosupply chain disruptions.Using Goal Seek, determine the maximum allowable increase in fixed costs that the company canabsorb without reducing its current profit markup of 30%.

ConclusionThis confirms that the maximum allowable fixed cost that the company can absorb without…

Answered: A manufacturing company is trying to…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Zhu Manufacturing is considering the Introduction of a family of new products. Long-term demand for the product group is somewhat predictable, so the manufacturer must be concemed with the risk of choosing a process that is inappropriate. Faye Zhu is VP of operations. She can choose among batch manufacturing or custom manufacturing, or she can invest in group technology, Zhu won't be able to forecast demand accurately until after she makes the process choice. Demand will be classified into four compartments: poor, fair, good, and excellebt The table below indicates the payoffs (profits) associated with each processidemand combination, as well as the probabilities of each long-term demand level: Demand Poor Fair Good Excellent Probability Batch Custom 0.15 0.40 -$300,000 $100,000 $1,200,000 $800,000 $400,000 $00,000 0.30 $1,200,000 $750,000 $500,000 0.15 $1,300,000 $800,000 $2,200,000 Group technology a) The alternative that provides Zhu the greatest expected monetary value (EMV) is…
Leah Johnson, director of Urgent Care of Brookline, wants to increase capacity to provide low-cost flu shots but must decide whether to do so by hiring another full-time nurse or by using part-time nurses. The table below shows the expected costs of the two options for three possible demand levels: States of Nature (demand) Alternatives Low Medium High Hire full−time $320 $480 $700 Hire part−time $0 $340 $800 Probabilities 0.20 0.55 0.25 Part 2 a) The alternative with the least expected cost is ▼ a. Hire full-time b. Hire part-time The expected price of this alternative is $_______ (enter your answer as a whole number). Part 4 b) The appropriate decision tree for Leah Johnson is presented in Figure____?
Two items are omitted from each of the following three lists of cost of goods sold data from a manufacturing company income statement. Determine the amounts of the missing items, identifying them by letter. Finished goods Inventory,June1 $61,600 $46,200 (e) Cost of goods manufactured 329,000 (c ) 484,800 Cost of finished goods available for sales (a) $260,400 $540,000 Finished goods Inventory ,June30 72,800 61,600 (f) Cost of goods sold (b) (d) $513,600
A manufacturer and a retailer are evaluating to form a supply chain (i.e. to act like a single company). They are currently supplying winter gloves. The manufacturer is producing each pair of winter gloves at $3, and selling each pair to the retailer at $6. The retailer is selling to the customers at $12 per pair. The retailer is philanthropic and donates all unsold winter gloves to a nearby charity home at the end of the season. The customer demand at the retailer is uniformly distributed between 5 and 55. The retailer places only one order per season. Compute the expected profit with and without the supply chain relationship and comment if they should form such a supply chain relationship.
Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton. The management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided: Budget Cost of fruit @ 10 pounds per carton $ 200,000 Cost of packaging @ 1 pound per carton $ 10,000 Labor costs @ .5 hourse per carton $ 90,000 Total Cost $ 300,000 Actual Cost of fruit @ 10 pounds per carton $ 244,200 Cost of packaging @ .55 pound percarton$ 11,000 Labor costs @ .75 hourse per carton $ 150,000 Total Cost $405,200 WHAT IS THE STANDARD COST…
On August, a light business bought $3600 worth of lamps. At the beginning of September, the store had $1400 in lights on hand, and by the end of September, it projected to have $1600 in lamps on hand to meet some of the forecasted October sales. And what's the August planned cost of goods sold?
Assume that you want to open a facility to produce wheelbarrows. Please analyze the market and forecast the daily demand. Belongs to your findings, what is takt time? (You are free to select the values of the related parameters by yourself.)
Leah Johnson, director of Urgent Care of Brookline, wants to increase capacity to provide low-cost flu shots but must decide whether to do so by hiring another full-time nurse or by using part-time nurses. The table below shows the expected costs of the two options for three possible demand levels: States of Nature (demand) Alternatives Low Medium High Hire full−time $320 $480 $700 Hire part−time $0 $350 $1,200 Probabilities 0.15 0.45 0.40 Part 2 a) The alternative with the least expected cost is ▼ a. Hire part-time b. Hire full-time The expected price of this alternative is $_______ (enter your answer as a whole number). Part 4 b) The appropriate decision tree for Leah Johnson is presented in Figure____?
You are responsible of developing the six-month aggregate production plan at Sodas Galore, a manufacturer of soft drinks. Your company makes three types of sodas: regular, diet and super-caffeinated. All three types are made using the same production process, and the switching costs can be ignored as they are so minimal. The S&OP team case created the following forecast of demand for the next six months. In addition to the sales forecast, the company has also developed planning values that are also shown in the next table. Month Sales Forecast (cases) Softdrinks Planning Values January 24,000 Current workforce 8 workers 32,000 Average monthly output per worker 32,000 Inventory holding cost 46,000 Regular wage rate February 4,000 cases per month $.30 per case per month $20.00 per hour March April May 60,000 Regular production hours/month 44,000 Overtime wage rate 160 hours June $30.00 per hour 240,000 Hiring cost $1,000 per worker $1.15 per case Total Subcontracting cost Firing/layoff…
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To illustrate these different approaches to Production Planning, identify to most appropriate Production Planning and Manufacturing approach the following industrial scenarios A company that manufactures tinned custard with predicted sales volumes of 6 million tins per year
Consider a manufacturer of perfume who is about to expand production capacity to make a new product. Three alternative production processes are available. The following table shows the estimated profits (in $) for these processes for each of the three possible demand levels for the product. Alternatives States of Nature Low demand Moderate demand High demand A 100,000 350,000 900,000 B 150,000 400,000 700,000 C 250,000 400,000 600,000 Based on the above information, what would be the amount of regret, if alternative production process B is selected by the manufacturer and suppose that the level of demand turns out to be low?

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