The decision will be made entirely based on cost

Assignment Help Operation Management

Reference no: EM132108612

Z Outreach is opening a kitchen to provide hot meals for the local homeless population. They are trying to decide how much of the cooking process to handle themselves, and how much to outsource to a national organization that specializes in these operations. Doing the cooking themselves has a lower variable cost, but requires investing in equipment. They are considering the following three options:

(1) Outsource all operations, for a variable cost of $0.90 per meal

(2) Invest in basic equipment only, and outsource remaining tasks

Fixed Cost: $1,500/year

Variable Cost: $0.55 per meal

(3) Invest in all necessary equipment, and do not outsource

Fixed Cost: $3,000/year

Variable Cost: $0.35 per meal

You can assume that there are no differences in quality or reliability; the decision will be made entirely based on cost.

NOTE: SHOW ALL YOUR WORK.

Comparing only options 1 and 2, how many meals per year must be served to justify Z investing in the basic equipment?

How many meals per year must be served to justify Z investing in all necessary equipment, given that both other options are available?

For what range of meals per year should Z invest in basic equipment only?

Reference no: EM132108612

Questions Cloud

Is the ppaca legislation an improvement or a liability : Is the PPACA legislation an improvement or a liability to our health care delivery system?" Use examples to illustrate your points and include pros and cons

Expected percentage change in multifactor productivity : What is the expected percentage change in multifactor productivity at AUmazon if the company invests in the new material handling technology?

Describe vroom model of expectancy theory : In a two- to three-page paper (excluding the title and reference pages), examine how Vroom's Model of Expectancy Theory can help with staffing issues.

Need to make an aggressive plan to prevent leafy splurge : You need to make an aggressive plan with the funding we have been provided to prevent leafy splurge from spreading further

The decision will be made entirely based on cost : You can assume that there are no differences in quality or reliability; the decision will be made entirely based on cost.

How did the change unfold : Give an example of a current event or a moment in history that triggered a shift in culture. What was it about that moment or event that gave.

Prepare solver model by logging all the information : Prepare the Solver model by logging all the information to the Solver Parameters window in Excel.

Based on your knowledge of relational databases : Based on your knowledge of relational databases, what sort of tables would such a loyalty program need in its database?

Organizational culture that relates to healthcare : Research and share two theories on organizational culture that relates to healthcare.

User Account

All Pages