appendixa_solutions

# appendixa_solutions - bapp01.qxd 11/10/06 5:41 PM Page 629...

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Chapter 2 1. Productivity of worker 1 5 1000 labels/30 minutes 5 33.3 labels per minute Productivity of worker 2 5 850 labels/20 minutes 5 42.5 labels per minute Worker 2 is more productive. 3. Productivity of older model machine 5 6 loaves/ 5 hours 5 1.2 loaves per hour Productivity of newer model machine 5 4 loaves/ 2 hours 5 2.0 loaves per hour The newer machine is more productive. 5. Productivity using former method 5 3 walls/ 45 minutes 5 .07 walls per minute Productivity using new method 5 2 walls/ 20 minutes 5 .10 walls per minute The new method is more productive. 7. a. Using only the nondefective production, productivity went from (20,000 3 0.85) 5 17,000 units/month to (25,000 3 0.91) 5 22,750 units/month b. Change in productivity 5 (22,750 2 17,000)/ 17,000 3 100% 5 33.8% increase 9. Work crew Productivity Anna, Sue, and Tim 10 homes/35 hours 5 0.29 homes per hour Jim, Jose, and Andy 15 homes/45 hours 5 0.33 homes per hour Dan, Wendy, and Carry 18 homes/56 hours 5 0.32 homes per hour Rosie, Chandra, and Seth 10 homes/30 hours 5 0.33 homes per hour Sherry, Vicky, and Roger 18 homes/42 hours 5 0.43 homes per hour Sherry, Vicky, and Roger are the most productive group. Chapter 3 1. a. Total Cost 5 \$40,000 1 \$45 Q Total revenue 5 \$100 Q Appendix A: Solutions to Odd-Numbered Problems Solutions to selected problems are available on the Student web site. To access these solutions, go to www .w ile y .c o m/ c ol le g e/r e id . Select the second edition, then Student Resources; and then Selected Solutions. Appendix A: Solutions to Odd-Numbered Problems Break Even Total Dollars Quantity 100,000 80,000 60,000 40,000 20,000 0 300 600 728 900 Total Revenue Total Cost Break Even Quantity 240,000 220,000 200,000 180,000 120,000 140,000 160,000 100,000 500 1000 1500 1334 2000 Process 1 Total Cost Process 2 Total Cost Break-even Quantity: Q 5 Fixed Cost/(Selling Price 2 Variable Cost) 5 40,000/(100 2 45) Q 5 727.3, so break even is exceeded at 728 units. 629 b. Contribution to Pro±t 5 Total Revenue 2 Total Cost 5 SP ( Q ) 2 [ FC 1 VC ( Q )] 5 80(2000) 2 [40,000 1 45(2000)] 5 \$30,000 c. Contribution to Pro±t 5 Total Revenue 2 Total Cost 5 SP ( Q ) 2 [ FC 1 ( Q )] 5 100(1500) 2 [40,000 1 45(1500)] 5 \$42,500 3. Break-even Quantity 5 Fixed Cost/(Selling Price 2 Variable Cost) 5 200/(1 2 0.20) 5 250 hot chocolates 5. a. bapp01.qxd 11/10/06 5:41 PM Page 629

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b. Process 1 is lower in total cost when the quantities are fewer than approximately 1300 tables. Process 2 becomes lower in total cost with quantities higher than 1300 tables. The actual break even may be calculated to be 1334. 7. a. Process A is better than outsourcing when demand is over 1000 chairs Indifference Quantity between Process B and Outsourcing Total Cost B 5 Total Cost O 5 [ FC 1 VC ( Q )] B 5 [ FC 1 ( Q )] O Q 5 30,000/(50 2 15) 5 857.14, or 858 chairs. Process B is better than outsourcing when demand is over 857 chairs In summation: Process A is never the best alternative. 13. It is known from problem 12, money is lost if demand is under 8,000 units. Given they will proceed: Breakeven Between Old and New Equipment: 5 FC o 1 o ( Q ) 5 FC n 1 n ( Q ) Q 5 2,000 Use the old equipment if demand is at most 2,000 units. Use the new equipment if demand is over 2,000 units.
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## This note was uploaded on 04/06/2010 for the course MIS knowledge taught by Professor Mohammed during the Spring '10 term at École Normale Supérieure.

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appendixa_solutions - bapp01.qxd 11/10/06 5:41 PM Page 629...

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