Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Optimal Capacity Determination
For a given capacity of a plant the average unit cost of production of a product decreases as the output rate( say in number of units produced per year.) in increases figure . this happens because we known that the fixed cost incurred in the plant, machinery equipment. Remains constant through changes in the volume of output. When a large number of units of the product are produced. These fixed costs get divided uniformly in the large number of units. Therefore the average cost per unit of the product decreases.When the rate of output is increased beyond a particular limit, the average unit cost start rising because of more frequent equipment breakdowns, fatigue in workers resulting in more defective items, scheduling problems inventory problems, etc. This particular limit of the output rate is called the optimum output rate, for which the average unit cost of the product is the minimum.
Figure: Optimal Capacity Determination
There is a relationship between the optimum output rate , minimum average unit cost of a product and the capacity of the plant. As shown in figure (b) for plants with small design capacity (small sized plant ) the optimum output rate is the lowest and the minimum average unit cost of product is the highest compared to medium sized and large sized plants.Thus while determining the optimal capacity of a new facility three important factors have to be kept in min. These are the demand forecast available capital and other resources, and the minimum average unit cost desired to keep the competitors at bay.
When you're creating a online site, how busy, technology intensive should you make it
1 Consider a local telephone company offering triple-play (TV, Internet, and Phone) services to residential customers in a single metropolitan area. What might be the reasons that
Do Whole Foods Market's mission/vision and the core values as presented in cases Exhibit 1 and 3 really matter? Are they "real" or just cosmetic window dressing? What evidence can
What are potential advantages and disadvantage of locating a production facility in foreign country instead of using domestic location?
Describe the internal and external environments of 2 real world companies using an environmental scan. What competitive advantages does each company have and what strategies are ea
Could you please explain to be how the point of prediction is computed in problem 14.48 (question b) from Essentials of Business Statistics. I understand all the numbers in the tab
Optimal solutions to linear programming problems are found under probabilistic assumptions
What are the classified different stock items? The ABC system of inventory management Various stock items are classified as like: a. High value (A) b. Medium value (B
A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have a variable cost of $25 and bar stools $20 Fixed cost for the firm is $200 a. if the sales m
How is anticipating a material requirement or need through purchasing's involvement on a new-product development team different from reacting to a purchase need?
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd