Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 1, Problem 12P
To determine
The least expensive method for setting-up capacity to produce drill bits.
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You should create a spreadsheet to answer
this and the following six questions. Your U.S.
based company exports drendles to the rest
of the world. The world market for drendles is
highly competitive (so competitive that
changes in production in the United States do
not impact the world price). The current price
of a drendle is €100/drendle. Your company's
cost function is C(q)=50,000 + 50q +0.02q2 in
U.S. dollars. If the exchange rate is 1.20$/€.
How much profit (in $US) does your firm
make? Round your answer to the nearest
penny. Numeric Response
If the exchange rate is 1.172$/€. How much
profit (in $US) does your firm make?
A recent engineering was given the job of determining the best production rate for a new type of casting in a
foundry. After experimenting with many combinations of hourly production rates and total production cost
per hour, he summarized his findings in (table 1). The engineering then talked to the firm's marketing
specialist, who provided estimates of selling price per casting as a function of production output (see table 2).
There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per
year?
Table 1
Total cost per hr
Casting production per hr
$1,000
100
$2,600
200
$3,200
300
$3,900
400
$4,700
500
Table 2
Selling price / casting Casting production per hr
$20.00
100
$17.00
200
$16.00
300
$15.00
400
$14.50
500
The answer is Blank 1 per hour
A recent engineering was given the job of determining the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rates and total production cost per hour, he summarized his findings in (table 1). The engineering then talked to the firm’s marketing specialist, who provided estimates of selling price per casting as a function of production output (see table 2). There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per year?
Table 1
Total cost per hr Casting production per hr
$1,000 100
$2,600 200
$3,200 300
$3,900 400
$4,700 500
Table 2
Selling price / casting Casting production per hr
$20.00 100
$17.00 200
$16.00…
Chapter 1 Solutions
Engineering Economy, Student Value Edition (17th Edition)
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- Paccar Winch makes winch components for its different product lines. The firm operates its production facility three hundred and five days per year. It has orders for about twelve thousand winch components per year and has the capability of producing one hundred and five per day. Setting up the winch production costs fifty five dollars. The cost of each winch component is one dollar and ten cents. The holding cost is fifteen cents per winch component per year. a) What is the optimal size of the production run? b) What is the average holding cost per year? c) What is the average setup cost per year? d) What is the total cost per year, including the cost of the winch components?arrow_forwardC&A Fast Food has four activities in serving a customer: greet customer, take order, process order, and deliver order. Each activity is staffed by one employee (for a total of four employees). The processing time for each activity is given as follows: Greet customer Take order Process order Deliver order Activity Processing time per customer 2 seconds 30 seconds 60 seconds 5 seconds Assume demand is unlimited. If one additional employee is added to the bottleneck activity, what will be the percentage change in process capacity?arrow_forwardA recent engineering was given the job of determining the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rates and total production cost per hour, he summarized his findings in table below (column 2). The engineering then talked to the firm’s marketing specialist, who provided estimates of selling price per casting as a function of production output (see table 1 column 3). There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per year? a) 100 ; b) 200 ; c) 300 ; d) 400 ; e) 500 show the computation how to solve it.arrow_forward
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