The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce the complexity of this problem, ignore the hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week’s work. HTM has received an order to build 1,000 oak desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk 2 weeks after the desks are delivered. Should HTM take this order? Week Units Week Units Week Units 1 2 3 4 5 2 4 8 12 4 6 7 8 9 10 24 64 128 128 128 11 12 13 14 15 Total 88 100 100 100 100 1000
The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce the complexity of this problem, ignore the hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week’s work. HTM has received an order to build 1,000 oak desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk 2 weeks after the desks are delivered. Should HTM take this order? Week Units Week Units Week Units 1 2 3 4 5 2 4 8 12 4 6 7 8 9 10 24 64 128 128 128 11 12 13 14 15 Total 88 100 100 100 100 1000
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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The Hand-To-Mouth Company (HTM) has $200,000 in cash, no inventory, and a 90 percent learning curve. To reduce the complexity of this problem, ignore the hiring and training costs associated with dramatically increased production. Employees are paid $20 per hour every Friday for that week’s work. HTM has received an order to build 1,000 oak desks over the next 15 weeks. Materials cost $400 per desk. Suppliers make deliveries each Monday and insist on cash upon delivery. The first desk takes 100 hours of direct labor to build. HTM will be paid $1,500 per desk 2 weeks after the desks are delivered. Should HTM take this order?
| Week | Units | Week | Units | Week | Units |
|
1 2 3 4 5
|
2 4 8 12 4
|
6 7 8 9 10
|
24 64 128 128 128
|
11 12 13 14 15 Total |
88 100 100 100 100 1000 |
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