Business Analytics
3rd Edition
ISBN: 9780135231715
Author: Evans
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 5PE
Suppose that a manufacturer can produce a part for
- If the anticipated production volume is
- What is the best decision?
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At the beginning of the year a company estimated that 20.000 direct labor hours would be required for the period's estimated level of production. The company also estimated $140 000 of fixed manufacturing
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Asume that Job X used $200 in direct materials, $280 of drect labor, and 20 direct labor hours. What is the total job cost for Job X"
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The cost of goods sold for Veltron International last year amounted to $561,000, and the average inventory at cost was $374,000. The published inventory turnover at cost is 6.6.
Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost (in $). (If the actual turnover is greater than the published rate, enter "above" for target average inventory.)
Inventory turnover at cost:
Target average inventory at cost:
The maintenance cost on a new machine is at the rate of 100t dollars per year at time t years. Compute total maintenance cost for the first four years. How many years will it take for the total maintenance cost to amount to $5,000?
Chapter 1 Solutions
Business Analytics
Ch. 1 - Discuss how you might use business analytics in...Ch. 1 - How might analytics be used in the following...Ch. 1 - A supermarket has been experiencing long lines...Ch. 1 - For each of the following scenarios, state whether...Ch. 1 - Suppose that a manufacturer can produce a part for...Ch. 1 - A bank developed a model for predicting the...Ch. 1 - Four key marketing decision options are price P,...Ch. 1 - Total marketing effort is a term used to describe...Ch. 1 - A manufacturer of headphones is preparing to set...Ch. 1 - In this chapter, we noted the importance of...
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- What is the total effect on the economy of a government tax rebate of $500 to each household in order to stimulate the economy if each household will spend of the rebate in goods and services?arrow_forwardIf during the following year it is predicted that each comedy skit will generate 30 thousand and each musical number 20 thousand, find the maximum income for the year. A television program director must schedule comedy skits and musical numbers for prime-time variety shows. Each comedy skit requires 2 hours of rehearsal time, costs 3000, and brings in 20,000 from the shows sponsors. Each musical number requires 1 hour of rehearsal time, costs 6000, and generates 12,000. If 250 hours are available for rehearsal and 600,000 is budgeted for comedy and music, how many segments of each type should be produced to maximize income? Find the maximum income.arrow_forwardA firm has redesigned its production process so that it now takes 10 hours for a unit to be made. Using the old process, it took 15 hours to make a unit. If the process makes one unit each hour on average and each unit is worth $1,500, what is the reduction in work-in- process value?arrow_forward
- At the beginning of year 1, a new machine must be purchased at the cost of 130K TL. The cost of maintaining a machine i years old is given in the table below. Due to the inflation, the purchase cost of a new machine at the beginning of Year 2, Year 3, and Year 4 would be 140K, 150K, and 165K respectively. The trade-in value is fixed at 50K for a replaced machine regardless of the age. Your goal is to minimize the total cost (purchasing plus maintenance) of having the machine for four years. Determine the year(s) in which a new machine should be purchased and calculate the total cost. Age at the beginning of the year Maintenance cost for the next year(K TL) 20 1 35 2 65 120arrow_forwardSuppose that a firm can produce a part it uses for $520 per unit, with a fixed cost of $25,000. The company has been offered a contract from a supplier that allows it to purchase the part at a cost of $544 per unit, which includes transportation. The key outputs in the model are the difference in these costs and the decision that results in the lower cost. Assume that the production volume is uncertain. Suppose the manufacturer has enough data and information to estimate that the production volume will be normally distributed with a mean of 1,000 and a standard deviation of 85. Use a 100-trial Monte Carlo simulation to find the average cost difference and percent of trials that result in manufacturing or outsourcing as the best decision. Please include table showing both the cost difference and decision for each trial. Please include the Excel worksheet with all the details with your answer.arrow_forwardA company currently has 6 people on a crew doing a manual labor job. Each person is paid at the rate of 12.00 per hour. A machine is being considered at the cost of $88,000. This machine operated by one technician who is paid at the rate of 18.00 per hour will have an hourly output equal to the six man crew. The machine will last 3 years. If the machine runs 2,000 hours per year what is the benefit / cost ratio.arrow_forward
- A publishing company sells 400,000 copies of a certain book each year. Ordering the entire amount printed at the beginning of the year ties up valuable storage space and capital. However, printing the copies in several partial runs throughout the year results in added costs for setting up each printing run, which costs $1000. The carrying costs, figured on the average number of books in storage, are $.50 per book. Find the most economical lot size, that is, the production run size that minimizes the total setting up andcarrying costs.arrow_forwardSolve these :arrow_forwardHolding costs are 35 MU/unit/year. The ordering cost is 120 MU/order and salesare relatively constant at 400 month.a. What is the optimal order quantity?b. What is the annual total inventory cost? Please mention formulas and do it in detail so I can understand.arrow_forward
- How many shoes would be required to sell to earn an operating profit of P1, 000, 000 if the XYZ Company sells this product with the following information: Selling price per unit of product x is 860, variable cost per unit is 600, and the total fixed cost is 8,000,000arrow_forwardShow complete solution to get an upvote thank you.arrow_forwardA mining company exploits two types of minerals, its starting cost is $ 100,000. The cost per kg is $ 100 and $ 150 respectively. For safety, the overall maximum inventory should be 80,000 kg. Product 2 that requires a maximum inventory of $ 2,000,000 invested in warehouse. Consider that the monthly demand is 40,000 and 30,000 units respectively. The weekly cost of the inventory rate is 10% for the average inventory. The total inventory turnover policy must be greater than or equal to 50 (remember that inventory turnover is defined as the annual demand for all items expressed in dollars, divided by the average total inventory investment). Formulate the problem as a mathematical model that minimizes the total annual cost.arrow_forward
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