Homework Questions

Homework 2

S7.5) If the plant efficiency is 80% then the effective capacity is 320 sinks, if the limited production is 400 per day.

S7.23) The Carter Manufacturing Company should invest in this new equipment because it can make 10,000 more units at the same price using the new equipment. The volume that the equipment choice changes on is 16,334 units, which is the average of the two break even points of the two different methods. At a volume of 15,000 units, the Carter Manufacturing Company should use the current method they have now because it costs them $1250 more using the newer method at this volume of units.

A.9) Based on expected value, the choice that offers the greatest gain is the Batch manufacturing because this choice has a gain of $1,000,000, where the other choices of custom manufacturing and group technology only have gains of $500,000 and $250,000, respectively. The amount that Chen Chung should be willing to pay for a forecast that would accurately determine the level of demand in the future would be $250,000, because at this amount he would still break even if he chose the least amount of gain of the three choices. He could see that he could make significantly more money using a different choice.

5.1) House of quality matrix for wristwatches shows that the customer wants a lightweight, reliable, affordable, attractive, and stylish watch. The company can develop this by having the date on the watch, having it metallic, a long-lasting battery, using cheap but strong parts, and having a new design. Using the cheap but strong parts will have the most impact on the development of the watch and will satisfy the customer needs the most in the most areas.