Engineering Economy (17th Edition)
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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