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A production process consists of a three-step operation. The scrap rate is 12 percent for the first step and 10 percent for the other two steps.

a. If the desired daily output is 457 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.)

Number of units ___________

b. If the scrap rate for each step could be cut in half at every operation, how many units would this save in terms of the scrap allowance? (Do not round intermediate calculations. Round up your final answer to the next whole number.)

Number of units ____________

c. If the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate (i.e. the Part a scrap rate)? (Round your final answer to the nearest whole number. Omit the "$" sign in your response.)

Cost $__________

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91884136

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