OPERATIONS MANAGEMENT CUSTOM ACCESS
OPERATIONS MANAGEMENT CUSTOM ACCESS
11th Edition
ISBN: 9780135622438
Author: KRAJEWSKI
Publisher: PEARSON EDUCATION (COLLEGE)
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 1, Problem 9P

The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s current daily labor cost is $320, the equipment cost is $125, and the overhead cost is $225. Daily demands, along with selling price and material costs per beverage, are given here:

Chapter 1, Problem 9P, The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s , example  1

Harald Luckerbauer, the manager at Morning Brew Coffee Shop, would like to understand how adding Eiskaffee (a German coffee beverage of chilled coffee, milk, sweetener, and vanilla ice cream) will alter the shop’s productivity. His market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before Eiskaffee is added to the menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $200, and the overhead cost is $350. Modified daily demands, as well as selling price and material costs per beverage for the new product line, are given here:

Chapter 1, Problem 9P, The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s , example  2

  1. Calculate the change in labor and multifactor productivity if Eiskaffee is added to the menu.
  2. If everything else remains unchanged, how many units of Eiskaffee would have to be sold to ensure that the multifactor productivity increases from its current level?

Blurred answer
Students have asked these similar questions
Charles Lackey operates a bakery in Idaho Falls,Idaho. Because of its excellent product and excellent loca-tion, demand has increased by 25% in the last year. On far toomany occasions, customers have not been able to purchasethe bread of their choice. Because of the size of the store, nonew ovens can be added. At a staff meeting, one employeesuggested ways to load the ovens differently so that moreloaves of bread can be baked at one time. This new processwill require that the ovens be loaded by hand, requiring addi-tional manpower. This is the only thing to be changed. If thebakery makes 1,500 loaves per month with a labor produc-tivity of 2.344 loaves per labor-hour, how many workers willLackey need to add? (Hint: Each worker works 160 hours permonth.)
Henri of Henri’s French Cuisine (HFC), a chain of 12restaurants, is trying to decide if it makes sense to outsource thepurchasing function. Currently, Henri employs two buyers at anannual fixed cost of $85,000. Henri estimates that the variable costof each purchase order placed is $15. Value-Buy (VB), a group ofpurchasing specialists, will perform the purchasing function fora fixed annual fee of $100,000 plus $5 for each purchase orderplaced. Last year, HFC placed 1450 purchase orders.(a) What was the cost last year to HFC when doing thepurchasing in-house?(b) What would the cost have been last year had HFC usedValue-Buy?(c) What is the indifference point for the two alternatives?(d) If HFC estimates it will place 1600 purchase orders nextyear, should it use VB?(e) What additional factors should be considered by HFC?
Proposed Solution methodology (EXCEL work)
Knowledge Booster
Background pattern image
Operations Management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
  • Text book image
    Marketing
    Marketing
    ISBN:9780357033791
    Author:Pride, William M
    Publisher:South Western Educational Publishing
Text book image
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY