Homework Clinic
Social Science Clinic => Business => Management => Topic started by: mwit1967 on Dec 3, 2019
-
A firm is about to undertake the manufacture of a product, and is weighing the process configuration options. There are two intermittent processes under consideration, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month, and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 and variable costs of $1 per unit.
a. At what output does the large intermittent process become cheaper than the small one?
b. At what output does the repetitive process become cheaper than the larger intermittent process?
-
(a) at 1125 units, the large job shop becomes cheaper than the small job shop
(b) at 38,000 units, the repetitive shop is cheaper than the larger job shop.
-
Thank y ou