Operations Management: Processes and Supply Chains (11th Edition)
Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
Question
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Chapter 12, Problem 12P

A

Summary Introduction

Interpretation: The number of breakers need per year by Equipment Company

Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.

B

Summary Introduction

Interpretation: The number of breakers need per year by ESE Company

Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.

C

Summary Introduction

Interpretation: The least costly option

Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.

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A global manufacturer of electrical switching equipment (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. The company estimates that the annual fixed cost of manufacturing the part in-house, which includes equipment, maintenance, and management, amounts to $10 million. The variable cost of labor and materials are $15.00 per breaker. The company has an offer from a major subcontractor to produce the part for $22.00 per breaker. a. How many breakers would the electrical switching equipment company need per year to make the in-house option the least costly? The company should consume View an example Get more help - breakers per year to make the manufacturing the part in-house option the least costly. (Enter your response rounded to the nearest whole number.) Clear all Check answer
A global manufacturer of electrical switching equipment (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. The company estimates that the annual fixed cost of manufacturing the part in-house, which includes equipment, maintenance, and management, amounts to $13 million. The variable cost of labor and materials are $13.00 per breaker. The company has an offer from a major subcontractor to produce the part for $23.00 per breaker. a. How many breakers would the electrical switching equipment company need per year to make the in-house option the least costly? The company should consume rounded to the nearest whole number.) breakers per year to make the manufacturing the part in-house option the least costly. (Enter your response b. Assume the subcontractor wants the company to share in the costs of the equipment. The ESE company estimates that the total cost would be $8 million, which also includes management oversight…
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