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

Radovilsky manufacturing company in hayward california

Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility operates 300 days per year. It has orders for about 12,400 flashing lights per year a ...

Refer to the root cause you identified in 6-4prepare a plan

Refer to the root cause you identified in 6-4. Prepare a plan to improve the process by eliminating the root cause. Estimate the time and cost involved. Also, document potential risks during the improvement process and p ...

Prepare a case study the case must involve some

Prepare a case study. The case must involve some organization. The case may come from an academic journal, a compilation of case studies, a situation reported in the local newspaper supplemented by discussion with someon ...

Part 3 coca-cola organizational chart and operations chart

Part 3: Coca-Cola Organizational Chart and Operations Chart (Topic 4) Organizational structure is a factor in implementing your plan. Using a graphic organizer, create an organization chart. Be sure the graphic organizer ...

Option establishing pmo governanceproject governance is an

Option : Establishing PMO Governance Project governance is an empowering aspect of the project management office (PMO) infrastructure management. The purpose of this assignment is for you to understand and synthesize the ...

What specific role does the integration of hris play in an

What specific role does the integration of HRIS play in an organization's training program. Explain how HRIS can be used to increase the efficiency and effectiveness of training initiatives. Parameters: Your initial resp ...

Analyze the major differences between marriott

Analyze the major differences between Marriott international and Starwood Hotels and Resorts before and after the merger. Show differences in Chart form.

Please do not make it public now make it days lateralpha

Please do not make it public now make it days later Alpha Manufacturing co. wants to hire a new Operation Manager for their New Plant. You were considered as a one of the potential candidate for this position of high exp ...

Discussion video review - crew resource management crmcrew

Discussion: Video Review - Crew Resource Management (CRM) Crew Resource Management - Human Factors and their relationship with equipment, procedures, people and the environment. Please go to the following video - Crew Re ...

1 is marketing really a universal concept defend your

1. Is marketing really a universal concept? Defend your reasoning. 2. How does the Bill of Rights, mainly the 1st Amendment both limit and protect business in general? 3. What are the characteristics of effective project ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen