What is the breakeven point for the new process

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Reference no: EM13791838

Complete the following from Ch. 5 and Ch. 6 of Operations Management:

• Problem 1- McBurger's fast-food restaurant has a drive-through window with a single server who takes orders from an intercom and also is the cashier. The window operator is assisted by other employees who prepare the orders. Customers arrive at the ordering station prior to the drive-through window every 3.6 minutes (exponentially distributed) and the service time is 2.4 minutes (exponentially distributed). Determine the average length of the waiting line and the waiting time. Discuss the quality implications of your results. If you decide that the quality of the service could be improved, indicate what things you might do to improve quality.

• Problem 2- Patricia Zell, a dollmaker from Olney, Maryland, is interested in the mass marketing and production of a ceramic doll of her own design called Tiny Trisha. The initial investment required for plant and equipment is estimated at $25,000. Labor and material costs are approximately $10 per doll. If the dolls can be sold for $50 each, what volume of demand is necessary for the Tiny Trisha doll to break even?

• Problem 3- Although it will fulfill her lifelong dream, Patricia is not confident that demand for her Tiny Trisha doll will exceed the breakeven point computed in Problem 2. If she chooses a less appealing site and does more of the work by hand, her initial investment cost can be reduced to $5000, but her per-unit cost of manufacture will rise to $15 per doll.

1. What is the breakeven point for this new process?

2. Compare this process to the process proposed in the previous problem. For what volume of demand should Patricia choose this process?

Reference no: EM13791838

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