Find what is the minimum unit price, Operation Management

Assignment Help:

An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000 per month. Current demand volume is 360,000 units per year. The firm can substantially improve the product quality by adding a new piece of equipment at an additional monthly fixed cost of $6,000. Variable cost would also increase to $.60 per unit, but annual demand volume is also expected to jump to 600,000 units due to the improved product quality. a. Based on the above information, determine whether the addition of the new equipment is a profitable proposition for the company. b. What is the minimum unit price that would render profitable the addition of the new equipment? Demonstrate clearly all the calculations that support your answers to the above questions.


Related Discussions:- Find what is the minimum unit price

Explain operations research and management science, In the Howard Raffia ar...

In the Howard Raffia article on Decision Analysis, there is an excellent perspective on one man's intellectual journey through the use of quantitative and qualitative analysis to a

Determine the biggest management challenge, What does Drucker see as the bi...

What does Drucker see as the biggest management challenge for the 21st century?  Answer: Improving the productivity of the office worker.

Describe concept of the internal customer, Discuss the concept of the inter...

Discuss the concept of the internal customer. Who are purchasing's internal customers?

Explain mamdouh finally sued for national origin, Mamdouh El-Hakem was empl...

Mamdouh El-Hakem was employed by BJY, Inc., for more than a year. His manager repeatedly called Mamdouh, an Arabic employee, "Manny" or "Hank", instead of his given name. His manag

Evaluate the servicescape dimensions, Question: (a) Services are usuall...

Question: (a) Services are usually produced and consumed simultaneously, and in many cases the customer has to enter the service facilities and be within the servicescape befo

Explain nnon-monetary motivation, Explain nNon-monetary motivation. No...

Explain nNon-monetary motivation. Non-monetary Motivation: The following are several of the techniques of providing motivation that are non-monetary in nature:- (i) Pra

Explain what is the optimal stocking level, Henrique's Correa's bakery prep...

Henrique's Correa's bakery prepares all its cakes between 4am and 6am so they will be fresh when customers arrive. Day-old cakes are virtually always sold but at a 50% discount off

Explain how is the search industry changing, How is the search industry cha...

How is the search industry changing? What forces seem most likely to bring about major change to the industry within the next three to five years?

Determine the normal completion time and cost, Atkinson department is insta...

Atkinson department is installing new computer system. They have to perform several activities. Following table provides information about the project: Activity

Explain appropriate levels of control for their inventory, Hatten (2009) st...

Hatten (2009) stated, because inventory is such a significant expense, most businesses look carefully for ways to determine the appropriate levels of control for their inventory. H

Write Your Message!

Captcha
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