Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Operation Management Expert

problem: A soft drink maker wishes to expand to a neighboring country. They want the product bottled in that country to evade political issues and to improve the local image of the product. They have recognized two options for the growth. The first is to build a highly automated plant. The economies of scale would permit them to generate a can of soda for $0.04 and the distribution costs would be $0.02 per can. This facility would cost $1 million per year in fixed costs. The second option would be to make a semi-automated plant which would cost $650,000 per year in fixed costs. Though, the cost to generate a can would be $0.07 and the distribution cost would be $0.04 per can.

a) Over what range of product would each plant be favored?

b) Assume that the company believes that the demand would be 6,000,000 cans per year. Assume that all costs except the variable cost (sum of the production and distribution costs) for the highly automated method are certain and can’t change. What would the variable cost (the sum of production and distribution cost) per can for the highly automated method encompass to be so that the soft drinker maker is indifferent among the two types of plants?

c) Now assume that each alternative has a different capacity. Total estimated demand for the year is 5,300,000 if the company sells each can for $0.32. Though, only the highly automated method can produce and distribute this amount. When the semi-automated process is employed, the company would only be capable to produce and distribute 4,200,000 cans yearly. To offset the lower volume, the company will raise the price of each can to $0.35. It will be capable to sell all it produces at this price. By using all of the information presented in the problem, which method should it use? describe why?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M99869

Have any Question? 


Related Questions in Operation Management

Define the decision variables and determine the objective

Define the decision variables and determine the objective function for the following problem. A plant has four operators to be assigned to four machines. The time (minutes) required by each worker to produce a product on ...

A system consists of 2 steps the first has a reliability of

A system consists of 2 steps. The first has a reliability of 0.94. The second has a reliability of 0.95. You consider the system reliability too low. You decide to add in a backup to step one. You add in a cheaper part w ...

The cases used for this discussion require you and your

The cases used for this Discussion require you and your classmates to analyze the applicability of a number of equal opportunity laws to different disputes. These laws include: Title VII of the Civil Rights Act of 1964 a ...

Each module has a set of review questions to assist you in

Each module has a set of review questions to assist you in learning the materials and help you prepare for the final exam. Spend quality time responding to the following questions in your own words. Explain the purpose o ...

Powerpoint presentation5-7 slides with speaker notes of

Powerpoint Presentation 5-7 slides with speaker notes of 200-250 words per slide (excluding title and reference slides) If you plagiarize, you wont get paid. I check it before I accept the answer. Thanks Defining the str ...

In a post of at least 200 words describe what you believe

In a post of at least 200 words, describe what you believe will be the major ethical concerns of the future. Will rapidly changing technology create more problems? Will medical advances give us additional issues to ponde ...

The new kilkenny highway commission is installing a

The New Kilkenny Highway Commission is installing a camera-based highway monitoring system to track the license plate numbers of cars entering and leaving the highway. They are examining two different camera systems. Sys ...

Triano brothers an insurance firm follows an administrative

Triano Brothers, an insurance firm, follows an administrative procedure for measuring the relative worth of its jobs. The organization does this by assembling and training a committee consisting of people familiar with t ...

Recommend a plan or strategy to be followed by safety

Recommend a plan or strategy to be followed by safety professionals if they become involved in the litigation process as a representative of an employer organization. A few paragraphs, work cited.

Problem suppose that a customer calls a call-center every

Problem: Suppose that a customer calls a call-center every minute on average and an agent can help a customer in 3 minutes on average. Both the time between customer calls and the time it takes an agent to help a custome ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro