Operations Management
Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 10, Problem 18P

A production process consists of a three-step operation. The scrap rate is 10 percent for the first step and 6 percent for the ether two steps

a. If the dewed duly output IS 450 units, how many units must be started to allow for loss due to scrap?

b. If the scrap rate for each step could be cut in half how many units would this save in terms of the scrap allowance?

C. If the scrap represents a cost of $10 per unit how much is it costing the company per day for the original scrap rate?

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At Fraser engineering. Erix is trying to decide whether to purchase a certain part to to have it produced internally. Internal production could use either of two processes. One would entail a variable cost per unit of $17, and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per-unit for any volume up to 30,000 units Vendor B has a price of $22 per-unit for demand of 1,000 units or less, and $18 per-unit for larger quantities. Vendor C offers a price of $21 per-unit for the first 1,000 units, and $19 for each additional unit. What is the correct formula to use to compare these options? Which options would be best for: I. 10,000 units? ii. 20,000 units? iii. 100,000 units? What is the value in considering these options across three very different demand values ranging from 10,000 to 100,000 units?
A production process consists of a three-step operation. The scrap rate is 10 percent for the firststep and 6 percent for the other two steps.a. If the desired daily output is 450 units, how many units must be started to allow for loss due toscrap?
Suppose the contracted volume changes to 275,000 gear housings. Based on the total​ cost, the process that is best suited for the new volume is ▼   DM FMS GPE .
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