Electrical switching equipment company

Assignment Help Operation Management
Reference no: EM13807546

A global manufacturer of electrical switching equipment (ESE) is considering outsourcing the manufacturing of an electrical breaker used in the manufacturing of switch boards. The company estimates that the annual fixed cost of manufacturing the part in-house, which includes equipment, maintenance, and management, amounts to $8 million. The variable cost of labor and materials are $11.00 per breaker. The company has an offer from a major subcontractor to produce the part for $16.00 per breaker.

a. How many breakers would the electrical switching equipment company need per year to make the in-house option the least costly?

b. Assume the subcontractor wants the company to share in the costs of the equipment. The ESE Company estimates that the total annual cost would be $5 million, which also includes management oversight for the new supply contract. For this concession, the subcontractor will drop the per unit price to $12.00. Under this assumption, how many breakers would the ESE Company need per year to make the in-house option least costly?

c. If the ESE manufacturer is expecting to use 1,500,000 breakers per year, which option (make in-house, use sub-contractor without sharing in the cost of equipment, use subcontractor with sharing in the cost of equipment) is the least costly?

Reference no: EM13807546

Questions Cloud

A new criminal trial : From the e-Activity, summarize at least two (2) arguments presented for and against granting Sandusky's motion for a new criminal trial. Identify the most likely factors that you believe would support the judge's decision to grant a new trial. Provid..
Statistical technique, hypothesis testing problems : Discuss the limitations and assumptions of your analysis. Is there any additional information that you would like to have before publishing your findings?
Evaluate different memory allocation techniques : The objective of this week's lab is to simulate and evaluate different memory allocation/deallocation techniques (first fit, next fit, best fit, and worst fit)when a linked list is used to keep track of memory usage
Words of the strategic plan for organization : Write a draft of no more than 1,800 words of the strategic plan for your organization (Xerox, Inc.), including the following:
Electrical switching equipment company : How many breakers would the electrical switching equipment company need per year to make the in-house option the least costly?
Land diving in vanatu, pentecost island diving : Land diving in vanatu, pentecost island diving on Pentecost island in Vanuatu, they could use a vairety of methods.Based on what you have learned.How do you think this activity should be studied? why?
Technological advancements and challenges : Technology can be both good and bad depending on how individuals use it. From the e-Activity, examine the key ways in which the company that you selected benefits from the influences of changing technological forces.
Create a program that prints a book : Create a program that prints a book. The book consists of the following components: A title and author and  Three chapters
Carefully review the grading rubric for the criteria : From the list provided, identify one theorist whose work regarding society you found most interesting. Using the knowledge you have gained thus far in this course, write a paper that describes the theory or work aligned to the chosen theorist and pro..

Reviews

Write a Review

Operation Management Questions & Answers

  What may explain american society''s greater tolerance

What may explain American society's greater tolerance for publicly expressed differences in religious or cultural behavior?

  Job satisfaction and performance

Examine the approach Trader Joe's uses to promote a positive work environment for its employees. Determine at least three (3) ways in which Trader Joe's is able to increase job satisfaction and performance.

  What are some of the issues regarding verbal language group

What are some of the issues you should be concerned about regarding verbal and nonverbal language for this group. What strategy would you use to begin to have everyone develop a relationship with each other that will help ease future negotiations, ..

  Define the inputs to risk identification

Define the inputs to risk identification. What tools and techniques need to be implemented on the project to ensure adequate input is received

  What are the main components of a strategic management

what are the major components of a strategic management process? in your view which of these components is the most

  Which proposal would you recommend to top management

Which proposal would you recommend to top management? Why? How much of a change in sales would be required in order to make the returns of the two proposals equivalent

  Determine the scope of the district 4 production

Review the project case. Determine the scope of the District 4 Production Warehouse Move project from the information provided in the case. Using the Project Scope Checklist, prepare a scope document for review and approval by the project sponsor ..

  Who are the most important stakeholders

McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.

  Identification of the successful characteristic of establish

Identification of the difficulties the managers may be having in establishing self-directed, high-performing teams. Identification of the successful characteristic of establishing self-directed, high-performing teams

  The rate of sale of leather chairs is estimated

The rate of sale of leather chairs is estimated at 4 per week. the buyer places orders every 5 weeks and delivery takes 6 weeks. A reserve equal to 2 weeks estimated sales is maintained. There are 20 leather chairs on hand and 15 on order. Cal..

  Explain the concept of performance management

You have been asked to return to your alma mater and speak to current students about performance management issues. Explain the concept of “performance management.” Identify the most prominent types of performance management plans. Compare the plans’..

  Describe the behaviors of leaders modeling excellence

Describe the behaviors of leaders modeling excellence. How do you assess excellence and how does that inspire you to perform at higher level?

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