Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
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?
answer letter E only!
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?
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- Your company is contemplating bidding on an RFP (Request For Proposal) to produce 100,000 units of a specialized part. Suppose, however, that the requesting company really needs only 90,000 units of the part. Also assume that, because the part is specialized, potential suppliers do not yet possess the machines and factories needed to produce it and that overhead expenses involved in production have yet to be incurred. Suppose the average costs of all potential suppliers are as follows: Units 90,000 100,000 O True Average Total Cost (Dollars Per Unit) O False 4 True or False: The requesting company can solicit lower bids by requesting 100,000 units as opposed to 90,000. 3arrow_forwardA large company in the communication and publishing industry has quantified the relationship between the price of one of its products and the demand for this product as Price=160−0.02×Demand for an annual printing of this particular product. The fixed costs per year (i.e., per printing)=$47,000 and the variable cost per unit=$40. What is the maximum profit that can be achieved? What is the unit price at this point of optimal demand? Demand is not expected to be more than 4,000 units per year. The maximum profit that can be achieved is $? (Round to the nearest dollar.) The unit price at the point of optimal demand is $? per unit. arrow_forwardYou are a manager at Glass Inc. — a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window.The results from the study are summarized below and are based on the 8 units of capital currently available at your plant. Workers are paid $ 60 per unit, per unit capital costs are $ 20, and your encapsulated windows sell for $ 12 each. Given this information, optimize your human resource and production decisions. Find a profit you earn. Labor Output 0 0 1 10 2 thirty 3 60 4 80 5 90 6 95 7 95 8 90 9 80 10 60arrow_forward
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