OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 11, Problem 3DQ
A school district has
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Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background
check in-house for $1.95 per search with a fixed cost of $23,000. A third-party online security firm offered
to do a similar security search for $9.00 per person with an annual service contract with STE. If STE's
forecast is 2,900 searches next year, should STE continue to do the search in-house or accept the third-
party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for the
breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to
the nearest dollar.
Breakeven quantity:
Since the demand forecast of 2,900 searches is -Select-than the breakeven quantity, STE
-Select- ✓outsource the work. STE -Select- $
by outsourcing.
searches
Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $3.48 per search with a fixed cost of $30,000. A third-party online security firm offered to do a similar security search for $9.00 per person with an annual service contract with STE. If STE's forecast is 3,100 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for the breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to the nearest dollar.
Breakeven quantity: searches
Since the demand forecast of 3,100 searches is than the breakeven quantity, STE outsource the work. STE $ by outsourcing.
Management for a 500 room lodging operation predicts the following statistics for August next year: 95 percent occupancy, $89 average room rate, and the operation will be open 31 days. Forecast the room sales amount for August next year.
Chapter 11 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - A school district has forecast student enrollment...Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - SOP or aggregate planning sometimes is confused...Ch. 11 - The XYZ Company manufactures a seasonal product....Ch. 11 - Prob. 8DQCh. 11 - Every firm has multiple objectives such as good...Ch. 11 - Prob. 10DQ
Ch. 11 - Prob. 11DQCh. 11 - Suppose we are considering the question of how...Ch. 11 - The Ace Steel Mill estimates the demand for steel...Ch. 11 - A barbershop has the following demand for haircuts...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - eXcel The Chewy Candy Company would like to...Ch. 11 - A company produces to a seasonal demand, with the...Ch. 11 - Prob. 8PCh. 11 - Question: 9. The Restwell Motel in Orlando,...Ch. 11 - eXcel 10. The Ban go Toy Company produces several...Ch. 11 - A small textile company makes several types of...Ch. 11 - Valley View Hospital faces somewhat seasonal...
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- Samantha’s Group of Companies is deciding if it should design an advertising system for use on its website. The first option is to skip out on designing, with no net costs or gains. The second option is System A, which would result in additional sales of either $25,000 under good conditions or -$15,000 under bad conditions. The final choice is System B, which would increase sales -$5,000 under both good and bad conditions. Note that it costs $25,000 to develop a system. Assume that good conditions are TWICE as likely as the bad conditions. (Hint: twice as likely means a ratio of 2:1). Outline the ultimate objective for the use of decision trees in product design. How is this objective accomplished? Draw the appropriate decision tree for the above problem.arrow_forward1. Base on your own understanding, explain the importance of Feasibility study in designing the food service facility?arrow_forwardWhat are ADDITIONAL CHALLENGES OF PLANNING SERVICE CAPACITY?arrow_forward
- What are demand forecasting and capacity strategy? Give an example of demand forecasting for a business.arrow_forwardCortez Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $50,000 for proposal A and $75,000 for proposal B. In addition to the proposed fixed costs from the two ve management at Cortez anticipates that they will have to spend $8,000 for installations be completed. The variable cost is $12.00 for A and $11.00 for B. The revenue generated by each unit is $24.00. a) The break-even point in dollars for the proposal by Vendor A = $ (round your response to the nearest whole number). b) The break-even point in dollars for the proposal by Vendor B = $| (round your response to the nearest whole number).arrow_forwardHow important feasibility studies as a prior step in setting up restaurant/food service facilities?arrow_forward
- A biotech firm is considering abandoning its old plant, built 23 years ago, andconstructing a new facility that has 50% more square footage. The original cost of the old facility was $300,000, and its capacity in terms of standardizedproduction units is 250,000 units per year. The capacity of the new laboratoryis to be 400,000 units per year. During the past 23 years, costs of laboratoryconstruction have risen by an average of 5% per year. If the cost-capacity factor, based on square footage, is 0.80, what is the estimated cost of the newlaboratory?arrow_forwardHow does planning for capacity in service differ from planning for capacity in manufacturing?arrow_forwardMary Williams, owner of Williams Products, is evaluating whether to introduce a new product line. After thinking through the production process and the costs of raw materials and new equipment, Williams estimates the variable costs of each unit produced and sold at $8 and the fixed costs per year at $70,000. Williams forecasts sales of 12,000 units for the first year if the selling price is set at $15 each. What would be the total contribution to profits from this new product during the first year?arrow_forward
- please answer quickarrow_forwardWAI is evaluating a new machine that reduces the machinetime needed for the standard corkscrew to 0.08 hour, but increasesthe machine time for the deluxe corkscrew to 0.40 hour.(a) Calculate the machine capacity needed for each period ifWAI uses the new machine.(b) Will the new machine prove benefi cial to WAI?arrow_forwardNumber of Ballots The university administration has asked a group of student leaders to vote on the aspects of college life to target for improvement over the next year. The choices were (H)ousing, (L)ibrary, (T)heater, and (F)itness center. The votes are summarized in the preference table, Preference 8 25 24 10 3 1st TLHT F 2nd LHLHIT 3rd HFTL L 4th FITF FIH What option is selected using the plurality-with-elimination method?arrow_forward
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