Practical Operations Management
Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Chapter 8, Problem 1P
Summary Introduction

Interpretation: The type of cost incurred at a facility even when it is idle is to be determined..

Concept Introduction: Fixed cost is a part of total cost which remains constant at all the levels of output.

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Gas sales across type: 80% of gas sales tend to be regular. 15% midgrade, 5% tend to be premium. $0.10 increase in price per gallon tends to decrease gallons sold by 1 to 3%. Jan-0.87, Feb-0.95, Mar-1.00, Apr-1.05, May-1.08, Jun1.15, Jul-1.13, Aug-1.07, Sep-1.02, Oct-0.94, Nov-0.89, Dec-0.85. You want the MAPE to be below 20%, if ypu can get it to or below 10% they'll throw in extra $10k. Wont get bonus if it is above 11% or 20%. It cannot be over 20%.
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