MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
12th Edition
ISBN: 9780134742366
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 8P
Techno Corporation is currently manufacturing an item at variable costs of $5 per unit. Annual fixed costs of manufacturing this item are $140,000. The current selling price of the item is $10 per unit, and the annual sales volume is 30,000 units.
- Techno can substantially improve the item’s quality by installing new equipment at additional annual fixed costs of $60,000. Variable costs per unit would increase by $1, but, as more of the better-quality product could be sold, the annual volume would increase to 50,000 units. Should Techno buy the new equipment and maintain the current price of the item? Why or why not?
- Alternatively, Techno could increase the selling price to $11 per unit. However, the annual sales volume would be limited to 45,000 units. Should Techno buy the new equipment and raise the price of the item? Why or why not?
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Students have asked these similar questions
PP.52 A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be as shown the table below:
Supply/Demand Info
Beginning
Jan
Feb
Mar
Apr
May
Jun
Forecast (demand)
53,800
53,400
51,000
63,800
49,200
59,000
Regular production
Overtime production
Subcontract production
Ending inventory
4,000
Hired employees
Fired employees
Total employees
190
Cost variables are as follows:
Cost Variables
Labor cost/hour
$16
Overtime cost/unit
$39
Subcontracting cost/unit
$35
Holding cost/unit/month
$14
Hiring cost/employee
$3,100
Firing cost/employee
$5,500
Here is some additional relevant (capacity) information:
Capacity Information
Total labor hours/SSD
4
Regular production units/employee/month
200…
Discuss how a human resource professional can better gain the confidence of senior management and, thereby, become a key participant/player in the organization’s future.
PP.63 Jupiter, a large candy company, is having great success with its "Swan" family of candy bars. Due to a number of factors they like to plan their production at least six months into the future. The table below contains their demand projections (in tons) for April through September:
Supply/Demand Info
Beginning
Apr
May
Jun
Jul
Aug
Sep
Predicted Sales
45,500
45,100
51,900
52,800
47,900
47,200
Regular production
Overtime production
Subcontract production
Ending inventory
14,400
Hired employees
Fired employees
Total employees
423
Cost variables are as follows:
Cost Variables
Labor cost/hour
$13
Overtime cost/ton
$30
Subcontracting cost/ton
$28
Holding cost/ton/month
$14
Hiring cost/employee
$3,700
Firing cost/employee
$5,800
Here is some additional…
Chapter A Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
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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