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

Give examples of quantitative data analysis technique, Provide an example o...

Provide an example of a situation when you would use a quantitative data analysis technique. Provide and example of a situation when you would provide a qualitative data analysi

Efforts to reduce materials waste & procure materials, 1. In the hypothetic...

1. In the hypothetical manufacturing company (figure) what other actions do you think management might take in addition to their efforts to reduce materials waste, procure material

Depict an aon diagram of the project, The following is a table of activitie...

The following is a table of activities associated with a project at Bill Figg Enterprises, their durations and what activities each must precede- Activity Duration (weeks) Prece

Explain sole responsibility for prioritizing, Customers have the sole respo...

Customers have the sole responsibility for prioritizing their own needs, selecting a contractor to perform their project, and terminating a project that is not working.

Describe the aspects of total quality management, Discuss the aspects of To...

Discuss the aspects of Total Quality Management (TQM) and how they apply in service- and product-based businesses.

Alternative structures discuss likely benefits to dominos, Evaluate alterna...

Evaluate alternative structures to determine which one would be most appropriate for Domino's to consider and discuss likely benefits Dominos would realize from adopting that struc

MBA, Q3. What do you understand by “line balancing”? What happens if balanc...

Q3. What do you understand by “line balancing”? What happens if balance doesn’t exist?

Explain what is statistical process control, What is Statistical Process Co...

What is Statistical Process Control? What are the advantages and disadvantages of SPC? Identify two or three applications in your organization that could benefit from Statistical P

Memorandum, You are the operations manager and in this capacity, you have b...

You are the operations manager and in this capacity, you have been asked to provide a location analysis on whether your company should expand an existing manufacturing plant or clo

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