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ABC Machine Shop, Inc., has a 1-year contract for the production of 48,000 gear housings for a new off-road vehicle. ABC hopes that the contract will be extended and the production volume increased in the future. ABC is considering three different production technologies: general-purpose equipment (GPE), flexible manufacturing system (FMS), and the expensive, but efficient, option of a dedicated machine (DM). The annual fixed and per unit variable costs for the three alternatives are tabulated below:
GPE FMS DM Annual fixed cost $260,000 $590,000 $810,000 Per unit variable cost $13 $8 $4
What is the cheapest cost for meeting the current order for 48,000 units? Specify only the amount. e.g. 3500000
what do you understand by line balancing what happens if balance doesn''t exist?
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