DreamInflate is a balloon manufacturing company. Balloon manufacturing consists of seven work stations, each performing a single step as indicated in the table below. There are five workers manned for the seven work stations as shown. Assume the workers are paid $15 per Worker Task Sequence Task Processing Time (secs/balloon) Dye production Electrocharging Dipping (Cold and Hot) Mortar Dipping Balloon inflation and delaltexing 1 30 W1 20 35 W2 4 25 W3 30 W4 Vulcanization 45 W5 7 Inspection/Testing 40 hour. Each balloon pack is sold for $6 and has a variable cost of $1. The company has fixed costs of $200 per hour. There is more demand than the overall production system can provide. Based on the information provided, answer the following questions: What is the cost of direct labor for balloons? • How much profit does DreamInflate make every hour? (note that the cost of direct labor is also a variable cost). What would the profit of DreamInflate be if the variable costs were 10 percent lower? What will the profit of DreamInflate be if fixed costsreduced by 10 percent? What would the profits per hour be, if DreamInflate reduced processing time of the bottleneck by 5 seconds for every balloon pack (assuming unlimited demand)?
DreamInflate is a balloon manufacturing company. Balloon manufacturing consists of seven work stations, each performing a single step as indicated in the table below. There are five workers manned for the seven work stations as shown. Assume the workers are paid $15 per Worker Task Sequence Task Processing Time (secs/balloon) Dye production Electrocharging Dipping (Cold and Hot) Mortar Dipping Balloon inflation and delaltexing 1 30 W1 20 35 W2 4 25 W3 30 W4 Vulcanization 45 W5 7 Inspection/Testing 40 hour. Each balloon pack is sold for $6 and has a variable cost of $1. The company has fixed costs of $200 per hour. There is more demand than the overall production system can provide. Based on the information provided, answer the following questions: What is the cost of direct labor for balloons? • How much profit does DreamInflate make every hour? (note that the cost of direct labor is also a variable cost). What would the profit of DreamInflate be if the variable costs were 10 percent lower? What will the profit of DreamInflate be if fixed costsreduced by 10 percent? What would the profits per hour be, if DreamInflate reduced processing time of the bottleneck by 5 seconds for every balloon pack (assuming unlimited demand)?
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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Transcribed Image Text:DreamInflate is a balloon manufacturing company. Balloon manufacturing consists of seven
work stations, each performing a single step as indicated in the table below. There are five
workers manned for the seven work stations as shown. Assume the workers are paid $15 per
Worker
Task Sequence
Task
Processing Time (secs/balloon)
1
Dye production
30
W1
Electrocharging
Dipping (Cold and Hot)
Mortar Dipping
Balloon inflation and delaltexing
2
20
3
35
W2
25
W3
30
W4
Vulcanization
45
W5
Inspection/Testing
40
hour. Each balloon pack is sold for $6 and has a variable cost of $1. The company has fixed
costs of $200 per hour. There is more demand than the overall production system can provide.
Based on the information provided, answer the following questions:
• What is the cost of direct labor for balloons?
• How much profit does DreamInflate make every hour? (note that the cost of direct labor
is also a variable cost).
What would the profit of DreamInflate be if the variable costs were 10 percent lower?
What will the profit of DreamInflate be if fixed costsyeduced by 10 percent?
• What would the profits per hour be, if DreamInflate reduced processing time of the
bottleneck by 5 seconds for every balloon pack (assuming unlimited demand)?
NM4|5
67
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