HW7-CapacityPlanning-solution - Problem 6 Utilization...

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Problem 6: Utilization Effective = (100%) = (100%) = 96.2% (0.5 point) Utilization Design = (100%) = (100%) = 83.3% (0.5 point) The utilization rates show that the facility’s current output is below its design and effective capacities. (1 point) Problem 10: a. 2 points Low Demand (0.30) $70,000 Large High Demand (0.70) $100,000 Low Demand (0.30) $50,000 Small Expand $90,000 High Demand (0.70) Do not Expand $60,000 b. EV small expansion = 90,000(0.70) + 50,000(0.30) = $78,000 (1 point) EV large expansion = 100,000(0.70) + 70,000(0.30) = $91,000 (1 point) Company should opt for the large expansion now. 3. Magnatree is a large company that has been working on a new product. This product has tremendous potential, but Magnatree must move quickly. They have decided that they will introduce the product in two months and have already started developing their advertising campaign. They are sure that the product will be a success, with a possibility that it will be a huge success. They recently found out that another company, Shadycorp, has some unique expertise that could
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This note was uploaded on 10/17/2011 for the course MNGT 368 taught by Professor Curthurds during the Spring '08 term at Nicholls State.

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HW7-CapacityPlanning-solution - Problem 6 Utilization...

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