Operations Management: Sustainability and Supply Chain Management (12th Edition)
Operations Management: Sustainability and Supply Chain Management (12th Edition)
12th Edition
ISBN: 9780134130422
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 5, Problem 10DQ
Summary Introduction

To determine: The information included in the bill of material.

Introduction: Bill of materials (BOM) is a list which carries the products required to produce the product.

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Question 4 b) Company ABC wishes to evaluate whether to produce a component internally or purchase from a vendor. The firm has the following options: Internal Production Process 1 Process 2 Purchase from Vendor Vendor 1 Vendor 2 Vendor 3 Variable cost of $17 per unit; annual fixed cost of $200,000 Variable cost of $14 per unit; annual fixed cost of $240,000 Offers a price of $20 per unit for any volume up to 30,000 units Offers a price of $22 per unit for 1,000 units or less, and $18 per unit for large quantities Offers a price of $21 per unit for the first 1,000 units and $19 per unit for additional units If the annual demand is 10,000 units, which alternative would be best from a cost standpoint? For 20,000 units, which alternative would be best?
Required information Skip to question   George Caloz & Frères, located in Grenchen, Switzerland, makes luxury custom watches in small lots. One of the company’s products, a platinum diving watch, goes through an etching process. The company has recorded etching costs as follows over the last six weeks:   Week Units Total Etching Cost 1 9 $ 21 2 12 25 3 13 30 4 9 20 5 11 25 6 18 34   72 $ 155   For planning purposes, management would like to know the variable etching cost per unit and the total fixed etching cost per week.   2-a. Using the least-squares regression method, estimate the variable etching cost per unit and the total fixed etching cost per week. 2-b. Express these estimates in the form Y = a + bX.
2.

Chapter 5 Solutions

Operations Management: Sustainability and Supply Chain Management (12th Edition)

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