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Week3 - Chapter 6 Questions 3.How does the production...

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Chapter 6 Questions 3. How does the production volume affect break-even analysis? A break-even analysis takes into account the production volume and the relevant cost of producing the volume by the available alternative processes. It calculates the relative profit or loss of the alternative processes, thus helping to decide which alternative to choose for a certain volume of production.
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BUSN 6110 Operations Project Management Summer, 2008 Week 3 Burnett Isenberg Page 174 3. Consider the construction of a simple 8" x 10" wood picture frame. The picture frame consists of four wood pieces that are cut from the wood molding, four staples to hold the frame together, a piece of glass, a backing board made of cardboard, six points to hold the glass and backing board to the frame, and a clip for hanging the picture frame from the wall. a. Construct an assembly chart for the picture frame. Answers will vary. b. Construct a flowchart for the entire process from receiving materials to final inspection. 6. A book publisher has fixed costs of $300,000 and variable costs per book of $8.00. The book sells for $23.00 per copy. a. How many books must be sold to break-even? FC = (P - VC) * Break-even (where FC = fixed cost, P = price, and VC = variable cost). $300,000 = ($23.00 - $8.00) * Break-even Break-even = 20,000 books b. If the fixed cost increased, would the new break-even point be higher or lower? Higher c. If the variable cost per unit decreased, would the new break-even point be higher or lower? Lower
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Chapter 6A Questions 1. What kind of layout is used in a physical fitness center? Process layout—similar equipment or functions are grouped together, such as rowing machines in one area, and weight machines in another. The exercise enthusiasts move through the fitness center, following an established sequence of operations.
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BUSN 6110 Operations Project Management Summer, 2008 Week 3 Burnett Isenberg Page 205 3. An assembly line is to operate eight hours per day with a desired output of 240 units per day. The following table contains information on this product's task times and precedence relationships: Task Task Time (Seconds) Immediate Predecessor A 60 -- B 80 A C 20 A D 50 A E 90 B. C F 30 C, D G 30 E, F H 60 G a. Draw the precedence diagram. b. What is the workstation cycle time? C = production time per day/required output per day = (8 hour/day)(3600 seconds/hour)/240 units per day =120 seconds per unit c. Balance this line using the longest task time. Task Task time Idle time I A 60 D 50 10 II B 80 C 20 20 III E 90 F 30 0 IV G 30 H 60 30 d. What is the efficiency of your line balance? Efficiency = Work station = .875 or 87.5% A B D C E F G 60 80 30 50 H 20 90 30 60 C N T a ) 120 ( 4 420
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Chapter 7 Questions 3. Could a service firm use production line approach or self-serve design and still keep a high customer focus (personal attention)? Explain and support your answer with examples.
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