How to acquire the cases for customized sound screamers

Assignment Help Operation Management
Reference no: EM131442354

Arthrodax Company has been approached by Ranger Sound with a rush order offer to purchase 100 units of a customized version of Arthrodax's SoundScreamer audio mixer at $5,000 per unit, and Arthrodax needs to decide how to respond. The electronic modifications of the standard SoundScreamer needed for this customized version are straightforward, but there will be a fixed cost of $100,000 to design the modifications and set up for assembly of the customized SoundScreamers, regardless of the number of units produced. It will cost $2,000 per unit to manufacture the circuit boards for the units. Since Arthrodax has some short term spare manufacturing capacity, the Ranger offer is potentially attractive. However, the circuit boards for the customized units will not fit into the standard SoundScreamer case, and Arthrodax must decide what to do about acquiring cases for the customized units as it decides whether to accept Ranger's purchase offer. An appropriate case can be purchased at $500 per case, but Arthrodax could instead purchase an injection molder to make the cases. It will cost $20,000 to purchase the molder, and there is a 0.6 probability that it will be possible to successfully make the cases using the molder. If the molder does not work, then the purchase price for the molder will be totally lost and Arthrodax must still purchase the cases at $500 per case. If the molder works, then it will cost $60 per case to make the cases using the molder. Regardless of which case is used, the cost of assembling the SoundScreamer circuit boards into the case is $20 per unit. Unfortunately, there is no way to test the molder without purchasing it. Assume that there is no other use for the molder except to make the cases for the Ranger order.

Draw a decision tree for Arthrodax's decision about whether to accept the Ranger offer and how to acquire the cases for the customized SoundScreamers.

Reference no: EM131442354

Questions Cloud

Categories about cerberus capital management : categories about Cerberus capital management
Special instrument products attempt to develop : To absorb some short-term excess production capacity at its Arizona plant, Special Instrument Products is considering a short manufacturing run for either of two new products, a temperature sensor or a pressure sensor. Draw decision tree diagram and ..
Draw decision tree for the decision that aba faces : Aba Manufacturing has contracted to provide Zyz Electronics with printed circuit (PC) boards under the following terms: 100:000 PC boards will be delivered to Zyz in one month, and Zyz has an option to take delivery of an additional 100,000 boards in..
How do you think the ethical responsibilities of leaders : Do you think that as a leader Hartfield has a responsibility for the health of his customers as well as how do you think the ethical responsibilities of leaders in this industry compare to those leaders in, say, the tobacco and alcohol industries and..
How to acquire the cases for customized sound screamers : Arthrodax Company has been approached by Ranger Sound with a rush order offer to purchase 100 units of a customized version of Arthrodax's SoundScreamer audio mixer at $5,000 per unit, and Arthrodax needs to decide how to respond. Draw a decision tre..
Human resource management professional : If you were a Human Resource Management professional for a large organization and you were giving a presentation to upper management about why cognitive testing should be included in the overall hiring and employee selection process, what would be th..
About the opportunity to purchase and encourage : How do you plan to reach your targets (what strategies/marketing activities are you thinking about to inform your target audience(s) about the opportunity to purchase and\encourage/motivate them to purchase?
The authors claims of copyright infringement : In addition, please include your view on the issue of on-line file sharing vs the authors claims of copyright infringement and loss of royalties. Is it right to download music, movies, etc without paying for them?
Firms focusing on responsiveness tend : A facility that also has low cost as its primary objective, but its strategic role is broader than that of an offshore facility is. Firms focusing on responsiveness tend to.

Reviews

Write a Review

Operation Management Questions & Answers

  Describe the five stages of skill acquisition

Describe the Five Stages of Skill Acquisition and how it relates to knowledge creation and creating a learning organization.

  Supply chain can be real source of competitive advantage

It has often been said that a well managed supply chain can be real source of competitive advantage. Why? Please provide at least three reasons to justify you answer.

  Which of the three operations limits the capacity

Management decides to run a second shift of eight hours for assembly line I plus a second shift of only four hours for the final assembly line. Five of the six drilling machines operate for eight hours a day. What is the new capacity? Which of the..

  What are results outcomes

What are results outcomes? Why do you think most organizations don’t use results outcomes to evaluate their training programs? Which outcome would you recommend? Please use an example to support your response.

  Accommodates local differences in consumer tastes-preference

What do you think Domino's does from an organizational perspective to make sure that it accommodates local differences in consumer tastes and preferences?

  How many packs of diapers should eb sell every month

Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and EB rents its factory for $4,000 per month. How many packs of diapers should EB sell every month to break even?

  Develop a new process for handling patient records

You have been asked to develop a new process for handling patient records. You’d like to convene a task force to design an ideal system. Based on the Hoy-Tarter Model of Shared Decision Making, you should seek out people who ___________________.

  Describes organization structure challenges

The case describes the organization structure challenges that Alan Mulally faced when he became President and CEO of Ford Motor Company. He was hired by William Clay Ford, Jr., the Board Chairman of Ford Motor Company and great-grandson of Henry Ford..

  Protection under the law against the occurrence of crimes

Some citizens complained to city council members that there should be equal protection under the law against the occurrence of crimes. The citizens argued that this equal protection should be interpreted as indicating that high-crime areas should hav..

  Identify the company mission statement

Identify the company's mission statement, vision statement, goals, objectives, and tactical plans. Explain how each of the four functions of management impacts the organization's goals and objectives.

  Incremental revenues equal incremental costs

When managers attempt to estimate both the qualifications and the number of workers that their organization will need in the future, this is knonw as: If an incremental analysis is applied to evaluate two alternatives and it is determined that increm..

  What does it mean to create a signature experience

Reflect on the Harvard Business School reading and podcast What it Means to Work Here, (found in your coursepak) as well as the examples provided in the article Culture Drives Employment Brand. What does it mean to create a “signature experience”?

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