Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $125,000 $200,000 $525,000 Per unit variable cost $16.00 $14.00 $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number). Part 3 The option FMS is best when the contracted volume is between and units (enter your responses as whole numbers). part 4 The option DM is best when the contracted volume is over units (enter your response as a whole number)
Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $125,000 $200,000 $525,000 Per unit variable cost $16.00 $14.00 $13.00 The option GPE is best when the contracted volume is below units (enter your response as a whole number). Part 3 The option FMS is best when the contracted volume is between and units (enter your responses as whole numbers). part 4 The option DM is best when the contracted volume is over units (enter your response as a whole number)
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.2SA
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Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000
gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:
gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow:
|
General-Purpose Equipment (GPE)
|
Flexible Manufacturing System (FMS)
|
Dedicated Machine (DM)
|
Annual contracted units
|
250,000
|
250,000
|
250,000
|
Annual fixed cost
|
$125,000
|
$200,000
|
$525,000
|
Per unit variable cost
|
$16.00
|
$14.00
|
$13.00
|
The option GPE is best when the contracted volume is below
units (enter your response as a whole number).
Part 3
The option FMS is best when the contracted volume is between
and
units (enter your responses as whole numbers).
part 4
The option DM is best when the contracted volume is over
units (enter your response as a whole number).
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