Question

3. A firm needs a new type of small appliance. The manager must decide whether to...

3. A firm needs a new type of small appliance. The manager must decide whether to purchase the appliance from a vendor at ten dollars per unit or to produce them in-house. The in-house process would have an annual fixed cost of $220,000 and a variable cost of eight dollars per unit. Determine the range of annual demand for which each of the alternatives would be best.

Business   Operations-Management   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A manager needs to decide whether to purchase new equipment and sell it after 5 years,...
A manager needs to decide whether to purchase new equipment and sell it after 5 years, or, lease the equipment from a vendor for the same period. The upfront price of the equipment is P = #×$3 000, with additional annual insurance and maintenance costs amounting to $11 020 (payable at the end of each year). Rent for the same equipment is $2 500 per month, payable annually (at the end of each year). What must be the minimum resale...
A local restaurant is expanding. The manager needs to decide whether to hire new employees or...
A local restaurant is expanding. The manager needs to decide whether to hire new employees or purchase more machines (capital). You know that employees cost $20/hour and produce about 30 more units of output (marginal product of labor) per hour. You know that machines cost about $10/hour and produce about 15 more units of output (marginal product of capital) per hour. The manager should... Expand by hiring more employees but no more machines. Expand by purchasing more machines but no...
A manager must decide how many machines of a certain type to buy. The machines will...
A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines...
Brady Jones is a manager at a local store that sells computers. He needs to decide...
Brady Jones is a manager at a local store that sells computers. He needs to decide how many computers to order based on the quantity discount schedule below. Annual demand is 150 computers, annual inventory carrying cost as a percent of unit cost is 18% (due to problems with obsolescence), and ordering costs are $20 per order. Quantity Price per Unit ($) 1-25 900.00 26-50 895.00 51+ 890.00 What is the Optimal Total Annual Cost? A. 3 B. 6 C....
A manager is trying to decide between two possible production processes. Process A would entail a...
A manager is trying to decide between two possible production processes. Process A would entail a variable cost of $33.24 per unit and an annual fixed cost of $44,055. Process B would entail a variable cost of $36.14 per unit and an annual fixed cost of $35,748. The output generated using Process A would sell for $78 per unit while the output generated using Process B would sell for $72 per unit. What is the volume for which the manager...
Boston Metal Company (BMC), a small manufacturer of fabricated metal parts, must decide whether to compete...
Boston Metal Company (BMC), a small manufacturer of fabricated metal parts, must decide whether to compete to become the supplier of transmission housings for Gulf Electric. Gulf Electric produces transmission housings in its own in‐house manufacturing facility, but it has almost reached its maximum production capacity. Therefore, Gulf is looking for an outside supplier. To compete, BMC must design a new fixture for the production process and purchase a new forge. The available details for this purchase are as follows:...
A manager must decide which type of machine to buy, A, B, or C. Machine costs...
A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $40,000 B $30,000 C $80,000 Product forecasts and processing times on the machines are as follows: Product Annual Processing Time Per                            Demand A B C 1 18,000 4 2 1 2 20,000 1 5 3 3 20,000 5 6 6 4 16,000 4 6 3 a)Assume that only purchasing costs are being considered. Compute the...
As operations manager of Holz Furniture, you must make a decision about adding a line of...
As operations manager of Holz Furniture, you must make a decision about adding a line of rustic furniture. Your decision will affect the business performance in the next decision horizon (the next five years). We assume a 16 percent interest rate. In discussing the possibilities with your sales manager, Steve Gilbert, you decide that there will definitely be a market and that your firm should enter that market. However, because rustic furniture has a different finish than your standard offering,...
A producer of pottery is considering the addition of a new plant to absorb the backlog...
A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have the following cost structures as shown in the table. The producer knows there is a big order or order contract that will be awarded by the giant retail WalWal. The producer is not certain as what capacity production is to produce. It all depends on WalWal’s contract. The producer has also been...
A producer of pottery is considering the addition of a new plant to absorb the backlog...
A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have the following cost structures as shown in the table. The producer knows there is a big order or order contract that will be awarded by the giant retail WalWal. The producer is not certain as what capacity production is to produce. It all depends on WalWal’s contract. The producer has also been...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT