Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:                                                                                             Variable costs (per unit) ($) Process type               Annualized fixed cost             labor               material          energy                                         Of  plant & equip.      Intermittent                      $1,000,000                               24                     26                    20 Mass customization         $1,190,000                              30                     18                    12 Repetitive                        $1,385,000                               28                     15                    11 Continuous                     $1,660,000                               25                     15                    10   Determine the most economical ranges of units for each process types. The Maxistand will sell for $129 per unit. What is the minimumnumber of Maxistand Metters Cabinets, Inc. needs to sell in order to make a net profit (Rev – Fixed Cost – Total Variable Cost) of $1,165,000?

ENGR.ECONOMIC ANALYSIS
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Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:

                                                                                            Variable costs (per unit) ($)

Process type               Annualized fixed cost             labor               material          energy

                                        Of  plant & equip.     

Intermittent                      $1,000,000                               24                     26                    20

Mass customization         $1,190,000                              30                     18                    12

Repetitive                        $1,385,000                               28                     15                    11

Continuous                     $1,660,000                               25                     15                    10

 

  1. Determine the most economical ranges of units for each process types.
  2. The Maxistand will sell for $129 per unit. What is the minimumnumber of Maxistand Metters Cabinets, Inc. needs to sell in order to make a net profit (Rev – Fixed Cost – Total Variable Cost) of $1,165,000?

 

 

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