Under which production range is each process appropriate?, Ask an Expert

Management Studies

Perry Equipment & Association Inc has 1 year contract for the production of 200,000 gear housings for a new off-road vehicle. Owner Adam Perry hopes the contract will be extended and the volume increased next year. Perry 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 follows:

GPE FMS DM
Annual fixed cost ($) 100,000 200,000 500,000
Per Unit Variable cost ($) 20 19 18

a. Under which production range is each process appropriate?
b. Which process is best for this contract?
c. Does your decision change if the per unit variable cost for DM increase to $21?
d. Determine the best process for each of the following volumes: (i) 75,000; (ii) 275,000 (iii) 375,000
e. If a contract for the second and third years is pending what are the implications for process selection?

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M9350065

Have any Question?Write your Review or question?

Related Questions in Operation Management

What has been your experience with hazard controls does

What has been your experience with hazard controls? Does your organization use a decision hierarchy, or does it go right to Personal Protective Equipment (PPE) or training after identifying a hazard? How could your organ ...

Discuss and apply simulation as a modeling tool for

Discuss and apply simulation as a modeling tool for decision making. Discuss the factors involved in work measurement and apply the relevant tools and techniques used in deriving standards and incentive piece rates. · Un ...

Dubai government has signed an agreement for construction

Dubai government has signed an agreement for construction of a 228,000 sq. ft. electronics and specialised waste recycling plant at Dubai Industrial Park by December 2018. The construction will cost 3m AED and ongoing op ...

You are the business manager of a fifteen-physician group

You are the business manager of a fifteen-physician group practice in family medicine that at a recent strategic planning retreat agreed to open a satellite clinic on the periphery of its current market area in order to ...

Crises at toyota and your client companyin this discussion

Crises at Toyota and Your Client Company In this discussion, review Gerondeau's 2015 article, "How Toyota Recovered From a Huge Crisis. What Can Be Learned From It." (as found in this unit's Studies). Respond to some or ...

Stephen curry vs lebron jamesendorsements can have an

Stephen Curry vs Lebron James Endorsements can have an enormous effect on brand recognition and the marketing strategies that a team, organization, or brand uses to reach its target market. Research athlete endorsers and ...

1 prior to the late 1800s there were essentially no

1. Prior to the late 1800's, there were essentially no immigration laws. If someone wanted to enter the United States and become a citizen it was possible. Excluding violent criminals, do you think that this would be a g ...

Companies that adopt purposeful strategies to build solid

Companies that adopt purposeful strategies to build solid partnerships with Indigenous peoples, businesses, and communities do so for a variety of reasons. Indigenous peoples add to a company’s diversity by offering uniq ...

What was kodaks digital imaging strategy during

What was Kodak's digital imaging strategy during 1992-2012? Why did the strategy fail (be specific offering an in-depth analysis) Was there a better alternative? (be specific with the identification of specific strategie ...

1 make a value stream map of a process that you select at a

1. Make a value stream map of a process that you select at a paperwork processing organization you choose. Identify at least two continuous process variables (Xs) and one measurable or key output variable (KOV,Y). Is the ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Operation Management Expert