EBK PRINCIPLES OF OPERATIONS MANAGEMENT
11th Edition
ISBN: 9780135175644
Author: Munson
Publisher: VST
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Question
Chapter 5.S, Problem 14P
a)
Summary Introduction
To determine: The revenue retrieval for GF.
Introduction: The revenue is the income obtained from the sale of products and services; it can also refer to any assets or capital related with the main operations of the firm before any expenses or costs are deducted.
a)
Expert Solution
Answer to Problem 14P
The revenue retrieval amount for GF Deluxe is $4.53.
Explanation of Solution
Given information:
GF Deluxe:
| Part | Resale revenue per unit | Recycling revenue per unit |
| Disposal cost per unit |
| Metal frame | $3.27 | $4.78 | $1.05 | $0.85 |
| Battery | $0.00 | $3.68 | $6.18 | $3.05 |
| Motor housing | $3.93 | $2.95 | $2.05 | $1.25 |
| Trimmer head | $1.25 | $0.75 | $1.00 | $0.65 |
PM:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.18 | $3.95 | $1.15 | $0.65 |
| Battery | $0.00 | $3.68 | $4.15 | $3.00 |
| Motor housing | $4.05 | $3.45 | $2.45 | $1.90 |
| Trimmer head | $1.05 | $0.85 | $1.10 | $0.75 |
Formula:
Calculate the revenue retrieval amount for GF Deluxe:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.27 | $4.78 | $1.05 | $0.85 |
| Battery | $0.00 | $3.68 | $6.18 | $3.05 |
| Motor housing | $3.93 | $2.95 | $2.05 | $1.25 |
| Trimmer head | $1.25 | $0.75 | $1.00 | $0.65 |
| Total | $8.45 | $12.16 | $10.28 | $5.80 |
| Total retrieval | $4.53 | |||
Table 1
The revenue retrieval amount is calculated by subtracting all the costs involved from the resale revenue obtained which is $4.53.
Hence, the revenue retrieval amount for GF Deluxe is $$4.53.
b)
Summary Introduction
To determine: The revenue retrieval for PM.
b)
Expert Solution
Answer to Problem 14P
The revenue retrieval amount for PM is $5.06.
Explanation of Solution
Given information:
GF Deluxe:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.27 | $4.78 | $1.05 | $0.85 |
| Battery | $0.00 | $3.68 | $6.18 | $3.05 |
| Motor housing | $3.93 | $2.95 | $2.05 | $1.25 |
| Trimmer head | $1.25 | $0.75 | $1.00 | $0.65 |
PM:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.18 | $3.95 | $1.15 | $0.65 |
| Battery | $0.00 | $3.68 | $4.15 | $3.00 |
| Motor housing | $4.05 | $3.45 | $2.45 | $1.90 |
| Trimmer head | $1.05 | $0.85 | $1.10 | $0.75 |
Formula:
Calculate the revenue retrieval amount for PM:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.18 | $3.95 | $1.15 | $0.65 |
| Battery | $0.00 | $3.68 | $4.15 | $3.00 |
| Motor housing | $4.05 | $3.45 | $2.45 | $1.90 |
| Trimmer head | $1.05 | $0.85 | $1.10 | $0.75 |
| Total | $8.28 | $11.93 | $8.85 | $6.30 |
| Total retrieval | $5.06 | |||
Table 2
The revenue retrieval amount is calculated by subtracting all the costs involved from the resale revenue obtained which is $5.06.
Hence, the revenue retrieval amount for PM is $5.06.
c)
Summary Introduction
To determine: The better model in terms of design.
c)
Expert Solution
Answer to Problem 14P
The better model in terms of design is PM.
Explanation of Solution
Given information:
GF Deluxe:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.27 | $4.78 | $1.05 | $0.85 |
| Battery | $0.00 | $3.68 | $6.18 | $3.05 |
| Motor housing | $3.93 | $2.95 | $2.05 | $1.25 |
| Trimmer head | $1.25 | $0.75 | $1.00 | $0.65 |
PM:
| Part | Resale revenue per unit | Recycling revenue per unit | Processing cost per unit | Disposal cost per unit |
| Metal frame | $3.18 | $3.95 | $1.15 | $0.65 |
| Battery | $0.00 | $3.68 | $4.15 | $3.00 |
| Motor housing | $4.05 | $3.45 | $2.45 | $1.90 |
| Trimmer head | $1.05 | $0.85 | $1.10 | $0.75 |
From Table 1 and 2, it can be inferred that PM has better design alternatives in terms of revenue retrieval because it has the highest revenue retrieval.
Hence, the PM is the better design alternative because it has a higher revenue retrieval opportunity.
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Chapter 5 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
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