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PSYCHO15rus [73]
3 years ago
9

A machine has a setup time of 150 minutes and run time of 0.0075 minutes per piece. Order sizes are typically 10,000 pieces. Aft

er a batch is processed, the process has to be stopped and the machine has to be setup before the next batch can be processed. Assume that a day consists of two shifts and each shift is 450 minutes long.
Find the capacity in pieces per day for this machine under the following assumptions:

a. A batch can consist of only one order; it cannot have other orders in it. (8 pts)
b. Three orders are combined to form a batch. (8 pts)
c. All orders can be combined into one batch. (8 pts)
d. What is the percent change in capacity as you go from (i) to (ii) to (iii)?
Business
1 answer:
kolbaska11 [484]3 years ago
4 0

Solution:

Given,

Setup time of machine= 150 min

0.0075 min/pc.

1 order =10,000 pcs.

1 day= 2 shifts X 450 min each

1 order per batch

10000 pcs per batch before setup required again

(150 min setup time) –> (75 min run time for 10000 pcs) –> (150 min setup time) –> (75 min run time for 10000 pcs) = 450 mins

Total for shift 1 = 20,000 pcs

Similarly, for Shift 2, total production cap = 20,000 pcs

So, total capacity in this case is 40,000 pieces/day

          3 orders per batch

         30,000 pcs per batch before setup required again

Shift 1: (150 min setup time) –> (225 min run time for 30,000 pcs) –> (75 min setup time) = 450 mins

Shift 2: (75 min setup time) –> (225 min run time for 30,000 pcs) –> (150 min setup time) = 450 mins

So, total capacity in this case is 60,000 pieces/day

All orders can be combined in one batch

No cap on number of orders in a batch

Shift 1: (150 min setup time) –> (300 min run time for 40,000 pcs) = 450 min

Shift 2: (450 min run time for 60,000 pcs) = 450 min

So, total capacity in this case is 100,000 pieces/day

From (i) to (ii) there is 50% increase in capacity

From (ii) to (iii) there is 66.67% increase in capacity

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Answer:

a) Break even in units= 12, 684 units; Break even in dollars= 547,727.27

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What is the desired profit                               $121,600

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Total amount is                                               $362,000

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Also, Calculate the Break even in dollars

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Solution C: Calculate salaries for salespeople to sell 21,500 units and make a profit of $121,600

We can start with an equation assumption as follows:

Let the required fixed cost be as follows:

The total fixed cost in solution 1 + X( the additional fixed cost required).

Therefore, the target profit

= Target Profit= Units to sell x (price- variable manufacturing cost) - the total fixed cost

= $121,600= 21,500 units x (43-17) - $241,000+ x

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x= 559,000-241,000-121,600

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