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Unformatted text preview: or two years, what implications does this have for his decision? ANSWERS: Problem 1: Solve for the crossover between GPE and FMS: 10X + 150000 = 8X + 350000 or 2X = 200000 x = 100,000 units Solve for the crossover between FMS and DA: 8X + 350000 = 6X + 950000 or 2X = 600000 X = 300000 Therefore, at a volume of 130,000 units, FMS is the appropriate strategy. Problem 2 & 3: 1 Below 100,000 units use GPE, between 100,000 and 300,000 use FMS, above 300,000 use DA Problem 4: If Jackson Custom Machine is able to get the customer to extend the contract for another two years, the owner would certainly wish to take advantage of the savings using Dedicated Automation. 2...
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- Fall '05