Purchasing the equipment from a productivity viewpoint

Assignment Help Operation Management

Reference no: EM131658394

Bob's botique makes 1,000 bagels per week, on average. Bob's current equipment has a book value of $15,000, and is expected to last for five more years. Bob's current labor costs are $13,500 per year. Bob is open all year long. a. what is the current productivity in terms of units of output per dollar unit? b. Bob has the option of purchasing new equipment at a cost of $20,000 (thus getting rid of the old machine) . It will be able to produce 3,000 bagles per week for 10 years. However, it will require that Bob hire one more worker, for $13,000 to operate the equipment. GIven that Bob expects that he will be able to sell all the bagles he produces, should he consider purchasing the equipment from a productivity viewpoint?

Reference no: EM131658394

Questions Cloud

Identify the three crimes in given case : While passing Makoto's house one night, Sarah sees a laptop computer left unattended on Makoto's porch. Sarah takes the computer, carries it home.

Describe the basis or framework you use for tour definition : Define in your words ethical nursing practice describe the basis or framework you use for tour definition

What is the price per square foot : The Net Built Area is defined as the enclosed area of a property excluding balconies, patios, porches or other similar external areas).

Develop lung cancer : Men who smoke are likely to develop lung cancer 50% of time, whereas men who don't smoke are likely to develop lung cancer only 2.5%

Purchasing the equipment from a productivity viewpoint : GIven that Bob expects that he will be able to sell all the bagles he produces, should he consider purchasing the equipment from a productivity viewpoint?

Island that will be developed off dubai : "Square Isle is a new island that will be developed off Dubai. It will measure 20km long by 20km wide.

What common-size analysis including vertical and horizontal : What is common-size analysis, including vertical and horizontal? Give a brief example to illustrate your points. Explain its usefulness and shortcomings.

Define the impact of failing to adjust policy in accordance : Contemplate the impact of failing to adjust policy in accordance with the changing reality of an older population

Discuss the civil tort suit against armington for damages : Armington was subsequently convicted of armed robbery and assault and battery in a criminal trial. Jennings later brought a civil tort suit against Armington.

User Account

All Pages