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.
A refinery in Houston replaces all of the 3" full-open ball valves in its facility according to a very strict maintenance policy which spaces replacements fairly uniformly througho
Factors for plant Location choice - Availability of Services There are six main services which need to be considered: Gas Electricity Water Drainag
How do you determine as a project manager when project work should be contracted out, and how does risk enter into the decision?
Abbott Manufacturing produces plastic cases for solar photovoltaic panels and has decided to combine orders from customers to increase work order size, and thereby make one large p
What are the three basic financial statements, and what major information does each contain? If you were planning to invest in a company, which of the three types of financial stat
Suppose you are the CEO of a growing fast food company, specializing in hamburgers. You are interested in expanding your business into new domains. What are some strategies that yo
The Electro comp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process fo each is similar in that both require a certain amount of
Wally and Beaver were general partners in a car dealership. Using the partnership name, Wally entered into a contract to purchase 30 used cars from Car Lots. Car Lots was not aware
Explain why the goods analogy of a supply chain is inappropriate for services
What is the current state of HRM-r related technologies in your organization? What are organizational leaders' positions as they relate to using HRM-r related technologies (for
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