An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costsof $30000 per month, and variable costs of $9 per unit. The larger intermittent process has fixed costs of $11000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $48000 and variable costs of $1 per unit.a. If the company produced 22000 units, what would be its cost under each of the threechoices?b. Which process offers the lowest cost to produce 39000 units? What is that cost?
An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costsof $30000 per month, and variable costs of $9 per unit. The larger intermittent process has fixed costs of $11000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $48000 and variable costs of $1 per unit.a. If the company produced 22000 units, what would be its cost under each of the threechoices?b. Which process offers the lowest cost to produce 39000 units? What is that cost?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costsof $30000 per month, and variable costs of $9 per unit. The larger intermittent process has fixed costs of $11000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $48000 and variable costs of $1 per unit.
a. If the company produced 22000 units, what would be its cost under each of the three
choices?
b. Which process offers the lowest cost to produce 39000 units? What is that cost?
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