Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 75,000 $100,000 $18.00 Flexible Manufacturing System (FMS) 75,000 $250,000 $14.50 Dedicated Machine (DM) 75,000 $500,000 $13.00

Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 75,000 $100,000 $18.00 Flexible Manufacturing System (FMS) 75,000 $250,000 $14.50 Dedicated Machine (DM) 75,000 $500,000 $13.00

Database System Concepts

7th Edition

ISBN:9780078022159

Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Chapter1: Introduction

Section: Chapter Questions

Problem 1PE

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Question

Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume
increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated
machine (DM). The cost data follow:
Annual contracted units
Annual fixed cost
Per unit variable cost
General-Purpose
Equipment (GPE)
75,000
$100,000
$18.00
Flexible Manufacturing
System (FMS)
75,000
$250,000
$14.50
Dedicated
Machine (DM)
75,000
$500,000
$13.00

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