heizer10flex_ch07_pp

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Practice Problems: Chapter 7, Process Strategy Problem 1: Jackson Custom Machine Shop has a contract for 130,000 units of a new product. Sam Jumper, the owner, has calculated the cost for three process alternatives. Fixed costs will be: for general- purpose equipment (GPE), $150,000; flexible manufacturing (FMS), $350,000; and dedicated automation (DA), $950,000. Variable costs will be: GPE, $10; FMS, $8; and DA, $6. Which should he choose? Problem 2: Solve Problem 1 graphically Problem 3: Using either your analytical solution found in Problem 1, or the graphical solution found in Problem 2, identify the volume ranges where each process should be used. Problem 4: If Jackson Custom Machine is able to convince the customer to renew the contract for another one
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