The net annual operating cost for a water treatment filtration plant for a semiconductor fabricationline was estimated to be $1,900,000 per year. The estimate was based on the $200,000 per yearcost of a 1-MGD plant. The exponent in the cost-capacity equation is 0.75. The size of the largerplant is nearest to:41,009,30032,052,56020,600,02020,120,162

The detailed solution is given in Step 2.

Answered: The net annual operating cost for a…

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

Similar questions

A local restaurateur, Cho Senn, is considering three options for his new Asian fusic restaurant. Option A - called Midtown - will have annual fixed costs of 42,500 an variable costs of 3.45 per customer. Option B - called Market - will have annual fixed costs of 30,000 and variable costs of 4.40 per customer. Finally Option C - called Mall has annual fixed cost of 19,500 and variable costs of 5.25 per customer. If Mr. Cho averages 8.25 in revenue per customer, what volume is required to breakeven with Option B? Your Answer: - Answer 4
Niue Vanilla has had two successive years in which the Vanilla bean harvest has stretched the firm’s capacity within their drying sheds. Pita, the manger for the drying operation must now make a decision on capacity for next year. Estimated profits under each of the three possible states of nature are as shown in the table below, along with 3 possible alternatives he is considering: Do Nothing, Expand the Drying Shed operation, or Subcontract to a local farmer group who can do some of the drying. Suppose after a certain amount of discussion, Pita is able to subjectively assess the probabilities of low, medium and high demand: P(low) = 0.2, P(Medium) = 0.35 and P(high) = 0.45 Determine the expected profit of each alternative. Which alternative is best? Why? Analyse the problem using a decision tree. Show the expected profit of each alternative on the tree.
A health centre specializes in the provision of sports/exercise and medical/dietary advice to clients. The service is provided on a residential basis and clients may stay for whatever number of days to suit their needs. Budgeted estimates for the year ending 30 June 2020 are as follows: (i) The maximum capacity of the centre is 50 clients per day for 350 days in a year. (ii) Clients will be invoiced at a fee per day. The budgeted occupancy level will vary with the client fee level per day and is estimated at different percentages of maximum capacity as follows: Client fee per day Occupancy level Occupancy as percentage of maximum capacity RM180 High 90% RM200 Most likely 75% RM220 Low 60% (iii) Variable costs are also estimated at one of three levels per client day. The high, most likely and low levels per client day are RM95, RM85 and RM70 respectively. The range of cost levels reflects only the possible effect of the purchase prices of goods…
Table 2 An Operations manager has narrowed the search for a new facility location to four communities. The annual fixed costs (land, property taxes, insurance, equipment, and buildings) and the variable costs (labor, materials, transportation overhead) are shown in table 2 Community Fixed Variable Costs/year Costs/unit Rs.62 A Rs.150,000 300,000 38 and variable 500,000 600,000 C 24 30 a) Plot the total cost curves for all the communities on a single graph. Identify on the graph the approximate range overwhich each community provides the lowest cost. b) Ifthe expected demand is 15,000 units peryear, what is the best location? c) Using break-even analysis, calculate the break-even quantities overthe relevant ranges.
The principal at Selena Valley High School, Mr John Dixon, is concerned about the school’s enrolment figures for 2018. Until 2010, the school had experienced strong growth, but since 2013 the enrolment numbers for Year 7 have been less than half of what they were in 2010. The Selena Valley is 50 minutes east of Melbourne and has had a recent influx of young families, but prior to this influx it was a small area with solid growth figures. Selena Valley High School is a coeducational institution with strong links to the local area in terms of apprenticeships and vocational education. The enrolment numbers for 2016 were 378 students from Years 7 to 12. Answer the following questions. 1. What is the major issue Selena Valley High School faces as of 2018 in terms of its customer base? 2. Identify whether each of the following factors is part of the internal or external operating environment of Selena Valley High School, and describe the effect each of these could have on the marketing…
Three graduates who recently graduated from the College of Law are considering opening a law office in that would make inexpensive legal services available to those who could not afford these services elsewhere. The intent is to provide easy access for their clients by having the office open 300 days a year, 8 hours each day from 8 A.M. to 4 P.M. The office will be staffed by a lawyer, assistant, secretary, and receptionist. To assist with market projections and to determine the feasibility of this project, the three graduates hired a management accountant who graduated from the College of Business and Economics of 8 years ago. The results of this market study show that if the firm spends USD 500,000 on advertising in the first year, the number of new clients expected each day may have the following probability distribution: Number of new clients per day Probability Expected Outcome 20 0.1 2 30…
Acme Steel Fabricators experienced booming business for the past five years. The company fabricates a wide range of steel products, such as railings, ladders, and light structural steel framing. The current manual method of materials handling is causing excessive inventories and congestion. Acme is considering the purchase of an overhead rail-mounted hoist system or a forklift truck to increase capacity and improve manufacturing efficiency. The annual pretax payoff from the system depends on future demand. If demand stays at the current level, the probability of which is 0.60, annual savings from the overhead hoist will be $10,000. If demand rises, the hoist will save $22,000 annually because of operating efficiencies in addition to new sales. Finally, if demand falls, the hoist will result in an estimated annual loss of $50,000. The probability is estimated to be 0.30 for higher demand and 0.10 for lower demand. If the forklift is purchased, annual payoffs will be $5,000 if…
The operations manager for an auto supply company is evaluating the potential purchase of a new machine for the production of a transmission component. Current manufacturing costs are fixed costs of $11,000 and a variable cost of $0.50 per unit. The new machine would have fixed cost of $4,000 and a variable cost of $0.75 per unit. Each component is sold for $1.50 per unit. (use a excel file to show all calculations) 1.Develop two separate models in your spreadsheet to calculate Total Profit for each option.The models must be flexible and able to calculate Total profit for any Quantity produced. 2.Find the break-even quantity for each option 3. Graph the Total profit for each option vs Quantity (both lines on one graph) Show Quantity from 0 to 50,000 4.Write an interpretation of your graph
Roche Brother is considering a capacity expansion of its supermarket. The landowner will build the addition to suit in return for $200,000 upon completion and a 5-year lease. The increase in rent for the addition is $10,000 per month. The annual sales projected through year 5 follows. The current effective capacity is equivalent to 500,000 customers per year. Assume a 2% pretax profit on sales Year 1 2 3 4 5 Customers 560,000 600,000 685,000 700,000 715,000 Ave. Sales per Customer 50.00 53.00 56.00 60.00 64.00 If Roche expands its capacity to serve 700,000 customer per year now (end of year 0), what are the projected annual incremental pretax cash flows attributable to this expansion? If Roche expands its capacity to serve 700,000 customer per year at the end of year 2, the landowner will build the same addition for $240,000 and a 3-year lease at $12,000 per month. What are the projected annual incremental pretax cash flows attributable…
Expando, Inc. is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $9 million. If demand for new products is low, the company expects to receive $11 million in discounted revenues (present value of future revenues) with the small facility. On the other hand, if demand is high, it expects $12 million in discounted revenues using the small facility. The second option is to build a large factory at a cost of $12 million. Were demand to be low, the company would expect $13 million in discounted revenues with the large plant. If demand is high, the company estimates that the discounted revenues would be $18 million. In either case, the probability of demand being high is 0.50, and the probability of it being low is 0.50. Not constructing a new factory would result in no additional revenue being generated because…
Hillary’s Flight Operations offers maintenance and repair services for business jets located in Atlanta. They are considering whether they should expand their operations. Hillary has decided that they have a number of options—four to be precise. They can keep their current facilities; they can modify their facilities to make them more efficient; they can expand their current facility; or they can rent additional space. The decision as to which option they should select is predicated upon the estimation of the direction of the economy for the next four years. Hillary’s Flight Operations developed the following decision matrix. What option should Hillary’s Flight Operations make based on Maximax criterion? Future Air Traffic Alternatives Down Same Up Keep As Is ($40,000) $70,000 $100,000 Remodel ($60,000) $65,000 $200,000 Expansion ($150,000) $50,000 $400,000 Rent ($50,000) $60,000 $80,000 Group of answer choices
System Options. JR Davidson recently started a practice in Landscape Design and is considering the purchase of an automated drafting system. JR can purchase a system with three possible drafting capacities. The payoffs for having any of these systems depend on the demand for drafting services over the next few years. The costs for each system are shown as follows along with JR’s assessment of the probabilities that demand will match the capacity of each one. Total Cost Probability Small system $11,000 0.29 Medium system $14,000 0.22 Large system $20,000 0.49 Working at capacity, each system would generate net cash flow at a yearly rate of 50% of its total cost. If a system is chosen that is smaller than demand, it would work at capacity. If a system is chosen that is larger than demand, revenue from the system would be limited by demand. For convenience, JR has initially decided to count cash flow for three years, without discounting. For example, if…

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

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

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

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…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS