OPERATIONS MANAGEMENT CUSTOM ACCESS
11th Edition
ISBN: 9780135622438
Author: KRAJEWSKI
Publisher: PEARSON EDUCATION (COLLEGE)
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Textbook Question
Chapter A, Problem 5P
Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $350,000 of fixed cost and add $50 of variable cost to each casting Spartan produces. The second process has fixed costs of $150,000 and adds $90 of variable cost per casting.
- What is the break-even quantity beyond which the first process is more attractive?
- What is the difference in total cost if the quantity produced is 10,000?
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Spartan Castings must implement a manufacturing process that reduces the amount of particulates emitted into the atmosphere. Two processes have been identified that provide the same level of particulate reduction. The first process is expected to incur $340,000 of fixed cost and add
$40 of variable cost to each casting Spartan produces. The second process has fixed costs of $100,000 and adds $70 of variable cost per casting.
a. What is the break-even quantity beyond which the first process is more attractive?
The break-even quantity is 8000 castings.
b. What is the difference in total cost if the quantity produced is
5,000?
The total cost of process 1 is greater. Find the difference in total cost?
The Colonial House Furniture Company manufactures two
A bicycle component manufacturer produces hubs for bike wheels. Two processes are
possible for manufacturing, and the parameters of each process are as follows:
Process 1
Production rate
Daily production time
Process 2
35 parts/hour
4 hours/day
20%
15 parts/hour
7 hours/day
9%
Percent parts rejected
Assume that the daily demand for hubs allows all defect-free hubs to be sold. Select the
process that maximizes profit per day if each part is made from $4 worth of material and
can be sold for $30. Both processes are fully automated, and variable overhead cost is
charged at the rate of $40 per hour.
Chapter A Solutions
OPERATIONS MANAGEMENT CUSTOM ACCESS
Ch. A - Mary Williams, owner of Williams Products, is...Ch. A - Prob. 2PCh. A - An interactive television service that costs $10...Ch. A - A restaurant is considering adding fresh brook...Ch. A - Spartan Castings must implement a manufacturing...Ch. A - A news clipping service is considering...Ch. A - Prob. 7PCh. A - Techno Corporation is currently manufacturing an...Ch. A - The Tri-County Generation and Transmission...Ch. A - Prob. 10P
Ch. A - Tri-County G&T sells 150,000 MWh per year of...Ch. A - The Forsite Company is screening three ideas for...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Janice Gould of Krebs Consulting is in the process...Ch. A - Build-Rite Construction has received favorable...Ch. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 20PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 24P
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