HW C5 - than the half of evening time), then plan B is...

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Chapter 05 - Strategic Capacity Planning for products and services 5-1 6. a. Cost for Plan A: $20 + $.45(120) + $.20(40) = $82 Cost for Plan B: $20 + $.55(120) + $.15(40) = $92 Cost for Plan C: $20 + $80 = $100 b. c. Plan A is optimal for zero to less than 178 minutes. Plan C is optimal from 178 minutes or more. Plan B is never optimal. d. A: $20 + $.45D + $.20E B: $20 + $.55D + $.15E (1) Setting these equal and solving, D = 0.5E (or 2D = E). Thus, if evening time is double the daytime, e.g., E = 100 minutes and D = 50 minutes, she would be indifferent between the two plans. (2) Setting A < B and solving, we have D > 0.5E. Thus, if the daytime usage is greater than the half the evening time, then plan A is better. However, if D < 0.5E (daytime usage is less
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Unformatted text preview: than the half of evening time), then plan B is better. Minutes of daytime calls $140 $120 $100 $80 $60 $40 $20 0 200 300 Weekly cost Plan C Plan B Plan A Chapter 05 - Strategic Capacity Planning for products and services 5-2 12. R = $5.95, VC = $3. One line would have a fixed cost of $20 ($6,000 ÷ 300) per hour and two lines would have a fixed cost of $35 ($10,500 ÷ 300) per hour. Volume No. of lines Profit 14 1 $21.30 = 14 ($5.95) – ($20 + $3*14) 15 1 24.25 = 15 ($5.95) – ($20 + $3*15) 16 2 12.20 = 16 ($5.95) – ($35 + $3*16) 17 2 15.15 = 17 ($5.95) – ($35 + $3*17) 18 2 18.10 = 18 ($5.95) – ($35 + $3*18) Choose one line. Assumption: Little or negligible cost of manufacturing....
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This note was uploaded on 03/16/2012 for the course OPM 300 taught by Professor Kim during the Spring '12 term at Drexel.

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HW C5 - than the half of evening time), then plan B is...

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