Yield the lowest total cost for an expected annual volume

Assignment Help Operation Management

Reference no: EM13956536

A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand existing facilities). Alternative A would involve substantial fixed costs but relatively low variable costs: fixed costs would be $275,000 per year, and variable costs would be $550 per boat. Subcontracting would involve a cost per boat of $2,550, and expansion would require an annual fixed cost of $55,000 and a variable cost of $1,040 per boat. a. Find the range of output for each alternative that would yield the lowest total cost. (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)

A___ or more

B___ to___

C_____ to __________

b. Which alternative would yield the lowest total cost for an expected annual volume of 240 boats?

A__

B___

C___

Reference no: EM13956536

Questions Cloud

Although there are many marketing variables : Although there are many marketing variables that impact the success or failure of strategy-implementation efforts, two variables are central to the process. What are these variables? Discuss why they are so important.

Define a normal profit and an economic profit : For this assignment you will do a significant portion of work in MS Excel and import it into an MS Word document for submission. You will use the data below to address Price and Output decisions faced by firms that are not in pure competition. Som..

What is the magnitude of the acceleration of the planet : A spherical shell has inner radius R_1, outer raduis R_2, and mass M, distributed uniformly throughout the shell. The magnitude of the gravitational force exerted on the shell by a point particle of mass m,located a distance d from the center, out..

Payment system to avoid fraudulent activity by providers : When you look at the health care delivery system do you find other ways that the government might change the payment system to avoid fraudulent activity by providers?

Yield the lowest total cost for an expected annual volume : A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives, A (new location), B (subcontract), and C (expand ex..

Comprehensive mythology for managing multiple risks : The Board of Trustees just appointed a new CEO for the health system you work in. After her initial meeting with the Chief Medical Officer, it was determined that serious attention is needed for a failing Risk Management department. It is critical th..

Probability that out of 3 people, 2 were born in same month : What is the probability 2 of more randomly selected senators have the same birthday (100 senators).

Describe the potential hazards : Think of a job common to construction worksites (for example, hanging drywall). List the steps for the job. For one of the steps, describe the potential hazards and suggest some possible control measures. Answer in 200 words in length.

User Account

All Pages