Borges machine shop inc has a 1-year contract for the, Ask an Expert

Management Studies

Borges Machine? Shop, Inc., has a? 1-year contract for the production of 250,000 gear housings for a new? off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are? general-purpose equipment? (GPE), flexible manufacturing system? (FMS), and? expensive, but? efficient, dedicated machine? (DM). The cost data? follow: Annual contracted units for all three alternatives=$250,000

GPE: Annual fixed cost=$150,000 Per unit variable cost= $16

FMS: Annual fixed cost=$200,000 Per unit variable cost= $14

DM: Annual Fixed cost=$525,000 Per unit variable cost=$13

The option GPE is best when the contracted volume is below ____ units ?(enter your response as a whole? number).

The option FMS is best when the contracted volume is between ____ and _____ units ?(enter your responses as whole? numbers).

The option DM is best when the contracted volume is over ____ units ?(enter your response as a whole? number).

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92026935

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