Homework Help is Here – Start Your Trial Now!
Business
Operations Management
Arca Cucine and Gaggenau are two European manufacturers of kitchen appliances that have merged. Arca Cucine has plants in Italy, Germany, and Finland, whereas Gaggenau has plants in the UK and Romania. The European market is divided into four regions: north, east, west, and south. Plant capacities (millions of units per year), annual fixed costs (millions of euros per year), regional demand (millions of units), and variable production and shipping costs (euros per unit) are as shown in Table 1 below. TABLE 1: Capacity, Cost, and Demand Data for CEDCD and Bemz Variable Production and Shipping Costs Annual Tax Company Plant/Destination North East South West Capacity Fixed Rate Cost Italy 100 110 110 10 100 50 1,000 0.25 Arca Cucine Germany 95 105 105 105 50 1,000 0.25 Demand Finland 90 100 115 110 40 850 0.3 30 15 20 35 UK 105 120 115 90 50 1,000 0.2 Gaggenau Gaggenau Romania 110 105 85 115 60 1,150 0.35 Demand Total Demand 15 20 30 20 45 35 50 55 Each appliance sells for an average price of 300 euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: Italy, 0.25; Germany, 0.25; Finland, 0.3; UK, 0.2; and Romania, 0.35. 1. After the merger, what is the minimum cost configuration if none of the plants is shut down? 2. After the merger, what is the minimum cost configuration if plants can be shut down (assume that a shutdown saves 100 percent of the annual fixed cost of the plant)?

Arca Cucine and Gaggenau are two European manufacturers of kitchen appliances that have merged. Arca Cucine has plants in Italy, Germany, and Finland, whereas Gaggenau has plants in the UK and Romania. The European market is divided into four regions: north, east, west, and south. Plant capacities (millions of units per year), annual fixed costs (millions of euros per year), regional demand (millions of units), and variable production and shipping costs (euros per unit) are as shown in Table 1 below. TABLE 1: Capacity, Cost, and Demand Data for CEDCD and Bemz Variable Production and Shipping Costs Annual Tax Company Plant/Destination North East South West Capacity Fixed Rate Cost Italy 100 110 110 10 100 50 1,000 0.25 Arca Cucine Germany 95 105 105 105 50 1,000 0.25 Demand Finland 90 100 115 110 40 850 0.3 30 15 20 35 UK 105 120 115 90 50 1,000 0.2 Gaggenau Gaggenau Romania 110 105 85 115 60 1,150 0.35 Demand Total Demand 15 20 30 20 45 35 50 55 Each appliance sells for an average price of 300 euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: Italy, 0.25; Germany, 0.25; Finland, 0.3; UK, 0.2; and Romania, 0.35. 1. After the merger, what is the minimum cost configuration if none of the plants is shut down? 2. After the merger, what is the minimum cost configuration if plants can be shut down (assume that a shutdown saves 100 percent of the annual fixed cost of the plant)?

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...
See similar textbooks
icon
Related questions
Question

This is for a supply chain management class. Please show how to solve using Solver in excel. and show all functions and calculations.  thanks.

Arca Cucine and Gaggenau are two European manufacturers of kitchen appliances that have merged. Arca Cucine has plants in Italy, Germany, and Finland, whereas Gaggenau has plants in the UK and Romania. The European market is divided into four regions: north, east, west, and south. Plant capacities (millions of units per year), annual fixed costs (millions of euros per year), regional demand (millions of units), and variable production and shipping costs (euros per unit) are as shown in Table 1 below. TABLE 1: Capacity, Cost, and Demand Data for CEDCD and Bemz Variable Production and Shipping Costs Annual Tax Company Plant/Destination North East South West Capacity Fixed Rate Cost Italy 100 110 110 10 100 50 1,000 0.25 Arca Cucine Germany 95 105 105 105 50 1,000 0.25 Demand Finland 90 100 115 110 40 850 0.3 30 15 20 35 UK 105 120 115 90 50 1,000 0.2 Gaggenau
Transcribed Image Text:Arca Cucine and Gaggenau are two European manufacturers of kitchen appliances that have merged. Arca Cucine has plants in Italy, Germany, and Finland, whereas Gaggenau has plants in the UK and Romania. The European market is divided into four regions: north, east, west, and south. Plant capacities (millions of units per year), annual fixed costs (millions of euros per year), regional demand (millions of units), and variable production and shipping costs (euros per unit) are as shown in Table 1 below. TABLE 1: Capacity, Cost, and Demand Data for CEDCD and Bemz Variable Production and Shipping Costs Annual Tax Company Plant/Destination North East South West Capacity Fixed Rate Cost Italy 100 110 110 10 100 50 1,000 0.25 Arca Cucine Germany 95 105 105 105 50 1,000 0.25 Demand Finland 90 100 115 110 40 850 0.3 30 15 20 35 UK 105 120 115 90 50 1,000 0.2 Gaggenau
Gaggenau Romania 110 105 85 115 60 1,150 0.35 Demand Total Demand 15 20 30 20 45 35 50 55 Each appliance sells for an average price of 300 euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: Italy, 0.25; Germany, 0.25; Finland, 0.3; UK, 0.2; and Romania, 0.35. 1. After the merger, what is the minimum cost configuration if none of the plants is shut down? 2. After the merger, what is the minimum cost configuration if plants can be shut down (assume that a shutdown saves 100 percent of the annual fixed cost of the plant)?
Transcribed Image Text:Gaggenau Romania 110 105 85 115 60 1,150 0.35 Demand Total Demand 15 20 30 20 45 35 50 55 Each appliance sells for an average price of 300 euros. All plants are currently treated as profit centers, and the company pays taxes separately for each plant. Tax rates in the various countries are as follows: Italy, 0.25; Germany, 0.25; Finland, 0.3; UK, 0.2; and Romania, 0.35. 1. After the merger, what is the minimum cost configuration if none of the plants is shut down? 2. After the merger, what is the minimum cost configuration if plants can be shut down (assume that a shutdown saves 100 percent of the annual fixed cost of the plant)?
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS