An electronics firm is currently manufacturing an item that has a variable cost of $0.50 per unit and a selling price of$1.00 per unit. Fixed costs are $14,000. Current volume is 30,000 units. The firm can substantially improve theproduct quality by adding a new piece of equipment at an additional fixed cost of $6,000. Variable cost would increaseto $0.60, but volume should jump to 50,000 units due to a higher-quality product.Based on the given information, the decision should be tosince the profit with the existingequipment is $ (enter your response to the nearest whole number and include a minus sign if necessary).

In the given question first we will calculate the profit under Present conditions and then after…

Answered: An electronics firm is currently…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

a bread manufacturer relies on maintenance employees to keep its rather quite old production equipment for their operation. Whenever the equipment breaks down, the maintenance team is able to repair the equipment quickly. However, they are less effective at avoiding these breakdowns and cannot predict when the equipment will break down. The maintenance group has modified the equipment over the years and, in any event, the manufacturer of the equipment is no longer in business. The maintenance employees teach each other how to repair the equipment, but have refused to document any of this information (saying that it is too difficult to document these details). The company owner has thought about firing the maintenance staff unless they document the maintenance procedures, but realizes that there is no one else who can repair the equipment. Discuss or explain the sources or types of power and contingencies (moderator) of power among the maintenance employees in this situation.
Which of the following should NOT be included in the analysis of a new product? 1. money already spent for research and development of the new product II. reduction in sales for a current product once the new product is introduced III. increase in accounts receivable needed to finance sales of the new product IV. market value of a machine owned by the firm which will be used to produce the new product V. $1,000,000 the company spent 5 years ago to buy a machine which will be used to produce the new product I and III QI and V II, III, and IV I, II, and IV
Your company has asked you to determine the financial risks of manufacturing 6,000 units of a product rather than purchasing them from a vendor at $66.50 per unit. The production line will handle exactly 6,000 units and requires a one-time setup cost of $50,000. The production cost is $60/unit. Your manufacturing personnel inform you that some of the units may be defective, as shown below: % defective 0 1 2 3 4 probability of 40 30 20 6 4 occurrence (%) Defective items must be removed and replaced at a cost of $145/defective unit. However, 100 percent of units purchased from vendors are defect-free. Construct a payoff table, and using the expected-value model, determine the financial risk and whether the make or buy option is best.
A certain custom engraving shop has traditionally had orders for between 1 and 50 units of whatever a customer orders. A large company has contacted this shop about engraving “reward” plaques (which are essentially identical to each other). It wants the shop to place a bid for this order. The volume is expected to be 12,000 units per year and will most likely last four years. To successfully bid (low enough price) for such an order, what will the shop likely have to do?
A manager of Splitter Manufacturing that produces computer hard drives is planning to lease a new automated inspection system. The manager believes the new system will be more accurate than the current manual inspection process. The firm has had problems with hard drive defects in the past and the automated system should help catch these defects before the drives are shipped to the final assembly manufacturer. Respond to all questions based on the data provided. Current Manual Inspection System Annual fixed cost = $45,000 Inspection variable cost per unit = $15 per unit New Automated Inspection System Annual fixed cost = $165,000 Inspection variable cost per unit = $0.65 per unit 2. In Problem 1, assume the cost factors given in “current manual system” have not changed. A marketing representative from Hi-Quality, a firm that specializes in providing manual inspection processes for other firms, approached Splitter…
Audiocables inc is currently manufacturing an adapter that has a variable cost of $0.50 per unit and a selling price of $1.20 per unit. Fixed costs are $14,000. Current sales volume is 30,000 units. The firm can substantially improve the product quality be adding a new piece of equipment at an additional fixed cost of $6,000. Variable costs would increase to$0.60, but sales volume should jump to 50,000 units due to higher quality products. What is the current profit and proposed profit of the sales of Audiocables? Should audiocables buy new equipment?
This is a subjective question, hence you have to write your answer in the Text-Field given below. 709-2023/ the fext-Fire 20 28/05/21-20214 Discuss any five common mistakes in automotive manufacturing and explain how Poka-Yoke can address those problems with examples 202118bts in au 09-2023/05/2 18b1305-82709-2023/ mples/05/21
A manager of Splitter Manufacturing that produces computer hard drives is planning to lease a new automated inspection system. The manager believes the new system will be more accurate than the current manual inspection process. The firm has had problems with hard drive defects in the past and the automated system should help catch these defects before the drives are shipped to the final assembly manufacturer. Respond to all questions based on the data provided. Current Manual Inspection System Annual fixed cost = $45,000 Inspection variable cost per unit = $15 per unit New Automated Inspection System Annual fixed cost = $165,000 Inspection variable cost per unit = $0.65 per unit a. Suppose annual demand is 7,000 units. Should the firm lease the new inspection system? Why or why not? (Your “why” should not be “the spreadsheet output indicated….”) b. Assume you are trying to change (or negotiate) situational factors to make…
A Customer Relationship Management System (CRMS) keeps track of customer requirements including past purchase history and preferences. True False
XYZ General Hospital is evaluating new office equipment offered by three companies. In each case the interest rate is 15% and the useful life of the equipment is 4 years. Use NPW analysis to determine the company from which you should purchase the equipment. A B First Cost $15, 000 $25, 000 $20, 000 Maintenance Cost 1, 600 400 900 Annual Benefit Salvage value 13, 000 6, 000 8, 000 11, 000 3, 000 4, 500
A work team is looking at a current product in the LUML catalog --- the L555X fixture. The L555X was introduced about 2 years ago; is a pretty good seller; seems to meet customer needs (virtually no complaints and few returns); and should be in production for several more years. No major changes in capability are planned. However, LUML is interested in improving the profits from the product. Marketing opines that the L555X is fairly priced given the competition and L555X’s capabilities. One option to try to increase profits is to raise the price (revenue) while holding the production expenses constant. Marketing believes that the L555X has a typical demand curve; and an increase in price will lead to a decrease in sales volume and lower overall revenue. On January 13, the team analyzed the current design and identified 63 parts in the L555X. On January 27 and 28, the team met with the industrial engineering department. Together they were able to identify 108 interfaces in the L555X.…
Is it true or is it false that The purchasing function is one of the most value enhancing functions in any organ wizard on. And therefore, it is not necessary to periodically monitor the purchasing function’s performance against a set of standards or industry benchmarks.

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS