Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
12th Edition
ISBN: 9780134742205
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 8P
Summary Introduction
Interpretation: The location that yields the higher total profit per year should be determined.
Concept Introduction: Supply chains are the combination of network of activities and resources. It involves raw materials, components and finished products. Organizations are able to reduce the excess costs and faster delivery to their destination.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Shoeless Joe is a specialty retailer that is deciding where tolocate a new facility. Th e annual fi xed and variable costs for eachpossible site have been estimated as follows:
If demand is expected to be 2000 units, which location is best?
During a major expansion in 2004, Douwalla’s Import Company developed a new processing line for which the delivered equipment cost was $1.75 million. This year, the board of directors decided to expand into new markets and expects to build the current version of the same line. Estimate the cost if the following factors are applicable: construction cost factor is 0.20, installation cost factor is 0.50, indirect cost factor applied against equipment is 0.25, and the total plant cost index has risen from 2509 to 3713 over the years.
Tyreek is comparing the cost to produce footballs at four different locations, shown in the table below along
with their cost structure. His marketing director feels that its premier model, The Tyreek,could become the
dominant model in the market. If volume is extremely high, which location will have the lowest cost?
Cost Data
Stillwater
Kansas City Miami
Fixed costs
$500,000
Direct material cost per unit
$10.00
Direct labor cost per unit
$3.00
$1.10
$1.10
Overhead per unit
Transportation cost per unit
Oa. Stillwater
b. Kansas City
O c. Douglas
d. Miami
Douglas
$650,000 $600,000 $800,000
$11.00
$8.00
$3.00
$4.00
$1.00
$1.50
$0.80
$1.25
$7.00
$5.00
$1.20
$0.90
Chapter 13 Solutions
Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
Ch. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7P
Ch. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 1AMECh. 13 - Prob. 2AMECh. 13 - Prob. 3AMECh. 13 - Prob. 4AMECh. 13 - Prob. 1VCCh. 13 - Prob. 2VCCh. 13 - Prob. 3VC
Knowledge Booster
Similar questions
- An operations manager wants to use factor rating method to decide the location of a new restaurant. Weights of the three factors specified, and the scores of two options are shown in the table below. Which option should the operations manager choose and what is the weighted score of this option? Factor Weight Option 1 Score Option 2 Score Proximity to the University 0.5 90 80 Rental Cost 0.3 80 100 Size 0.2 70 70 Option 2, weighted score = 84 Option 2, weighted score = 83 Option 1, weighted score = 83 There is no difference between the two options Option 1, weighted score = 84arrow_forwardA firm that recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi MS; or Birmingham, AL. Prepare an economic analysis of the three locations giving the following information. Annual costs for building, equipment, and administration would be $64,000 for Memphis, $74,000 for Biloxi, and $109,000 for Birmingham. Labor and materials are expected to be $7 per unit in Memphis, $6 per unit in Biloxi, and $6 per unit in Birmingham. The Memphis location would increase system transportation costs by $63,000 per year, the Biloxi location by $73,500 per year, and the Birmingham location by $25,900 per year. Expected annual volume is 14,900 units. Total Cost Memphis _______________ Biloxi _______________ Birmingham _________________arrow_forwardWhat is meant by the terms “flexibility,” “expansion,” and “access” in site selection for a processing plant?arrow_forward
- The Quick Copy center for document copying is decidingwhere to locate a new facility. Th e annual fi xed and variable costsfor each site it is considering have been estimated as follows: If demand is expected to be 3000 units, which location is best?arrow_forwardA small firm produces and sells novelty items in a five-barangay area. The firm expects toconsolidate assembly of its greeting cards line at a single location. Currently, operations are in three widelyscattered locations. The leading candidate for location will have a monthly fixed cost of Php 42,000 andvariable costs of Php3 per card. Card sell for Pho7 each. Prepare a table that shows total profits, fixed costs, variable costs, and revenues for monthly volumes of 10,000, 12,000, and 15,000 units. What is the break-even point?arrow_forwardA small firm produces and sells novelty items in a five-barangay area. The firm expects to consolidate assembly of its greeting cards line at a single location. Currently, operations are in three widely scattered locations. The leading candidate for location will have a monthly fixed cost of Php42, 000 and variable costs of Php3 per card. Cards sell for Php7 each. Prepare a table that shows total profits, fixed costs, variable costs, and revenues for monthly volumes of 10,000, 12,000, and 15,000 units. What is the break-even point?arrow_forward
- Populate the relevant data Is any alternative never preferred? Complete a numeric locational cost-volume Indicate over what range each of the alternatives A, B, C is the low-cost choice Costs A B C Fixed ($) 2,500,000 2,000,000 3,500,000 Variable ($ per unit) 20+6 23+6 15+6arrow_forwardFactors Influencing Facility Location For commercial success, and competitive advantage following are the critical factors: Customer Proximity: Facility locations are selected closer to the customer as to reduce transportation cost and decrease time in reaching the customer. Business Area: Presence of other similar manufacturing units around makes business area conducive for facility establishment. Availability of Skill Labor: Education, experience and skill of available labor are another important, which determines facility location.arrow_forwardDumfries Newcastle up Isle of Man United Kingdore Scarborough Cardin 09 Trent In the anyLogistix Tutorial assigned, students performed a Greenfield Analysis (GFA). What does GFA mean? What were the main inputs into the model that you either entered by hand or imported via the provided spreadsheet (hint: there were two of them)? The picture above shows a sample of a GFA experiment output. Explain what the output is showing here. What does this mean for a supply chain network designer? The next higher-level analysis, network optimization considers constraints that would add complexity to the GFA and possibly create a different configuration. What are some of the constraints that go beyond what was considered in GFA?arrow_forward
- Texas Seasonings is considering three alternative locations for a new plant for producing its seasoning. Below are the associated fixed and variable costs. Assume the revenue is the same regardless of plant location. Which location will never be preferred, and why?arrow_forwardA firm that has recently experienced enormous growth is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $40,000 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $25,000 per year. Expected annual volume is 10,000 units. 6.arrow_forwardAndec is considering opening a new smelter in Cuenca; Quito, or Portoviejo, to produce rebar. The following fixed cost and variable cost data were collected.a) Plot the total cost lines.b) In what annual volume range will each facility have a competitive advantage? each facility?c) Perform the intersection volume calculation for the locations. Costs per Unit Location Fixed cost per year Material Variable labor General Expenses Cuenca $73.000 $0,50 $0,40 $0,55 Portoviejo $55.000 $0,45 $0,55 $0,60 Quito $80.000 $0,38 $0,80 $0,90arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.