Find what is the minimum unit price, Operation Management

Assignment Help:

An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000 per month. Current demand volume is 360,000 units per year. The firm can substantially improve the product quality by adding a new piece of equipment at an additional monthly fixed cost of $6,000. Variable cost would also increase to $.60 per unit, but annual demand volume is also expected to jump to 600,000 units due to the improved product quality. a. Based on the above information, determine whether the addition of the new equipment is a profitable proposition for the company. b. What is the minimum unit price that would render profitable the addition of the new equipment? Demonstrate clearly all the calculations that support your answers to the above questions.


Related Discussions:- Find what is the minimum unit price

Illustrate example of queuing theory in operation management, Illustrate th...

Illustrate the examples of the queuing theory in operation management? Example of Queuing theory, a mathematical study of the formation of waiting queues or lines (physical or

Sports of All Sorts, Formulate, but do not solve, the Linear Programming mo...

Formulate, but do not solve, the Linear Programming model which minimizes total shipping costs for the question below. Note: Skateboards can only be shipped in whole units (not i

Explain different forecasting techniques, An analyst must decide between tw...

An analyst must decide between two different forecasting techniques for weekly sales of roller blades: a linear trend equation and the naive approach. The linear trend equation is

Explain global environmental concepts, Consider an international firm you a...

Consider an international firm you are familiar with, and consider what the firm needs to be concerned about when entering a foreign marketplace. Specifically, in terms of the chap

Explain why is it impirtant for pay to be externally fair, 1. Why is it imp...

1. Why is it impirtant for pay to be externally fair? 2. Why is it important for pay to be internally fair? 3. What should Costa Vida's compensation strategy look like?

Explain how to perform a swot analysis, Watch the video, How to Perform a S...

Watch the video, How to Perform a SWOT Analysis, and then conduct a SWOT analysis using the Starbucks' Global Quest 2006: Is the Best Yet to Come? case provided in the Course Mater

What are policy and operative decisions, What are policy and operative deci...

What are policy and operative decisions? Policy decisions are very significant, they are taken by top management, and they have a long-term impact and mostly relate to fundamen

Define what are the possible core competencies of wild west, WIld West, Inc...

WIld West, Inc., is a regional telephone company that inherited nearly 100000 employees and 50000 retirees from AT&T. Wild West has a new mission: to diversify. It calls for a 10 y

Explain types of organizational culture, Choose two specific features of or...

Choose two specific features of organizational structure described in chapters 5, 6, 8, and/or 9 and discuss how these specific features might lead to specific types of organizatio

Write Your Message!

Captcha
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