You are the operations manager for Louisiana Oysters, Inc. The company has designed new "Oyster shucking" knife that is expected to reduce risk of injury to the user. Your firm plans to begin production of these knives soon. Either of two machines, A or B could be used for in-house production. Machine A would have a fixed cost of $6000 and a variable cost of $5 per knife produced, and machine B would have a fixed cost of $9600 but a variable cost of $3 per knife. Each knife is expected to sell for $15. Determine the Range of annual “Volume of Business“[Q], for which each of the two alternative machines would be optimal i.e. best. Hint: Compute various break-even points for your evaluation
You are the operations manager for Louisiana Oysters, Inc. The company has designed new "Oyster shucking" knife that is expected to reduce risk of injury to the user. Your firm plans to begin production of these knives soon. Either of two machines, A or B could be used for in-house production. Machine A would have a fixed cost of $6000 and a variable cost of $5 per knife produced, and machine B would have a fixed cost of $9600 but a variable cost of $3 per knife. Each knife is expected to sell for $15.
Determine the Range of annual “Volume of Business“[Q], for which each of the two alternative machines would be optimal i.e. best.
Hint: Compute various break-even points for your evaluation
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