Ops Mgmt 8e ch07pp

Ops Mgmt 8e ch07pp - Problem 4: If Taggert Custom Machine...

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Practice Problems: Chapter 7, Process Strategy Problem 1: Taggert Custom Machine Shop has a contract for 130,000 units of a new product. James Taggert, the owner, has calculated the cost for three process alternatives. Which process should he choose for this new contract? General Purpose Equipment (GPE) Flexible Manufacturing (FMS) Dedicated Automation (DA) Fixed Costs $150,000 $350,000 $950,000 Variable Costs $10 $8 $6 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.
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Unformatted text preview: Problem 4: If Taggert Custom Machine is able to convince the customer to renew the contract for another one or two years, what implications does this have for his decision? ANSWERS: Problem 1: Solve for the crossover between GPE and FMS: Solve for the crossover between FMS and DA: 1 Therefore, at a volume of 130,000 units, FMS is the appropriate strategy. Problem 2 & 3: Problem 4: If Taggert Custom Machine were 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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Ops Mgmt 8e ch07pp - Problem 4: If Taggert Custom Machine...

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