Change over-labout intensity and flexibility

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Reference no: EM131725041

1. How would you characterize the most important difference for the following issues when comparing a workcenter (job shop) and an assembly line? Change over; Labout intensity; Flexibility

2. A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $9200 per month and variable costs of 70 cents per unit produced. Each item is sold to retailers at a price that averages 90 cents. The plant will be capable of producing at most 40000 units a month. Should the producer consider this plant or not? Why?

a. Enough information is not given to decide one way or another.

b. No, the producer should not build this plant because this capacity option can not possibly be profitable.

c. Yes, the producer should build this plant because it will meet the backlogged demand.

d. Yes, the producer should build this plant because this capacity option is potentially profitable.

Reference no: EM131725041

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