Which process should be used and why

Assignment Help Operation Management
Reference no: EM131919650

Question: The Jazzy Java Company is considering upgrading its espresso machine to reduce the time to make each cup of coffee. The current machine has fixed costs of $3,000 per year and variable costs of $.75 per cup of coffee. With the new machine, fixed costs increase to $7,000 per year and variable costs are $.40 per cup of coffee.

a. What is the indifference point between the two processes?

b. If the forecast is for 12,500 cups of coffee to be sold each year, which process should be used? Why?

Reference no: EM131919650

Questions Cloud

What is your total dollar return on your investment : 1. One year ago, you purchased 250 shares of Titan Wood Products for $56.66 per share. What is your total dollar return on your investment?
How choice of process supports organization priorities : Explain how the choice of process supports each organization's competitive priorities. Is the operations layout likely to be the same or to be different.
What is crossover rate between projects : What is the payback period of project E? What is the crossover rate between projects A and B?
Review problem of the gourmet food company : The process used by the Gourmet Food Company to produce dressings has annual fixed costs of $240,000 and variable costs of $0.50 per bottle.
Which process should be used and why : The Jazzy Java Company is considering upgrading its espresso machine to reduce the time to make each cup of coffee.
What is the total cost to the firm of issuing the securities : What is the total cost to the firm of issuing the securities? (Round answer to nearest whole dollar, e.g. 5,275.)
What sales volume is needed to justify the investment : Party Pools LLC assembles pool pumps for residential in-ground swimming pools. Fixed costs to produce model P07 pump are $75,000 per year.
What were the proceeds for issuer and the underwriter : Bellex Technologies agreed to complete its IPO on a best-effort basis. What were the proceeds for the issuer and the underwriter?
Expectations theory-compute the expected interest rates : Using the expectations theory, compute the expected interest rates (yields) for each security one year from now.

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd