Operations Management - Essay Example

Operations Management: Ch. 7 and Ch. 8 Lecturer: Affiliation: Due CHAPTER 7 a. Find breakeven points, X p. Mass Customization 260, 000 + 60 X = 120 X → X p = 21, 000 Intermittent: Repetitive: 1, 625, 000 + 55 X = 120 X → X p = 25, 000 Continuous: b. 1, 000, 000 + 70 X = 120 X → X p = 20, 000 1,960, 000 + 50 X = 120 X → X p = 28, 000 Find least-cost process at X = 24, 000 units. Fixed cost VC Units Mass Customization: 1, 260, 000 + 60 ( 24, 000 ) = 2, 700, 000 Intermittent: Repetitive: 1, 000, 000 + 70 ( 24, 000 ) = 2, 680, 000 1, 625, 000 + 55 ( 24, 000 ) = 2,945, 000 Continuous: 1,960, 000 + 50 ( 24, 000 ) = 3,160, 000 The least-cost process: Intermittent Process. c. 24,000 > 20,000 Yes: Anticipated Production Volume Intermittent Process Breakeven Point Annual Profit Using Intermittent Process: $120 ( 24, 000 ) − 2, 680, 000 = $200, 000 Answer: The intermittent process will maximize annual profit.

Annual Profit: $200,000 A-20 CHAPTER 8.1 CX ( 2, 000 )( 2.5) + ( 5, 000 )( 2.5) + (10, 000 )( 5.5 ) + ( 7, 000 )( 5.0 ) + (10, 000 )( 8.0 ) + ( 20, 000 )( 7.0 ) + (14, 000 )( 9.0 ) = 6.67 2, 000 + 5, 000 + 10, 000 + 7, 000 + 10, 000 + 20, 000 + 14, 000 ( 2, 000 )( 4.5 ) + ( 5,000 )( 2.5 ) + (10, 000 )( 4.5) + ( 7,000 )( 2.0 ) + (10, 000 )( 5.0 ) + ( 20,000 )( 2.0 ) + (14, 000 )( 2.5 ) Cy With a financial calculator, enter the following: N = 10; I = YTM = 9%; PMT = 0.08  1,000 = 80; FV = 1000; PV = VB = ?

PV = $935.82. Alternatively, VB = $80(PVIFA9%, 10) + $1,000(PVIF9%, 10) = $80(6.4177) + $1,000(0.4224) = $513.42 + $422.40 = $935.82. Reference Nigel Slack, Alistair Brandon-Jones, Robert Johnston. Operations Management (7th Edition). John Wiley and Sons, 2013.