Garrity Industries
manufactures snowboards.
George Olivier?,
the? CEO, is trying to decide whether to adopt a lean thinking model. He expects that adopting lean production would save
$95,000
in warehousing expenses and
$43,500
in spoilage costs. Adopting lean production will require several? one-time up-front? expenditures:
$12,500
for an employee training? program,
$95,000
to streamline the? plant's production? process, and
$7,750
to identify suppliers that will guarantee zero defects and? on-time delivery.
Requirements
1. What are the total costs of adopting lean? production?
2. What are the total benefits of adopting lean? production?
3. Should
Garrity IndustriesGarrity Industries
adopt lean? production? Why or why? not?
Requirement 1. What are the total costs of adopting lean? production?
The total costs of adopting lean production are
?$____
| 1 | Total cost of adopting lean production: | |||||||||
| Employee training program | 12500 | |||||||||
| Streamlining plant's production process | 95000 | |||||||||
| To guarantee zero defects | 7750 | |||||||||
| Total cost of adopting lean production | 115250 | |||||||||
| 2 | Total benefits of adopting lean prosuction: | |||||||||
| Savings in warehousing expense | 95000 | |||||||||
| Savings in spoilage costs | 43500 | |||||||||
| Total benefits of adopting lean prosuction | 138500 | |||||||||
| 3 | Garrity Industries should adopt lean production since the total benefits exceed the total cost by $23250. | |||||||||
Get Answers For Free
Most questions answered within 1 hours.