Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 8, Problem 1.4CE
To determine
Reason for rejection of order.
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Purpoll Oven operates a bakery in Quezon City. Due to its delicious products andstrategic location, there is a 25% increase in their demand last year. However, their customershave not been able to buy the bread of their choice. Meanwhile, additional ovens can’t be addedto the facility due to its size. During the kaizen meeting, a staff suggested a different process toload the oven, making the process more efficient. This process will require manual loading ofbread into the oven, hence additional labor is needed. This is the only this to be changed.Assuming every employee works 192 (24 days per month, 8 hours per day) hours per monthand the bakery makes 2,000 bread per month with a labor productivity of 3.472 bread permanhour, how many workers will the bakery need to add?
Acme Distributors has an annual demand for an airport metal
detector of 1,575 units. The unit cost of a typical detector to
Acme is $333.00. Holding cost is estimated to be 15.5% of the
unit cost, and the ordering cost is $25 per order.
a. What is the optimal order quantity (EOQ), given the current
ordering policy (without price breaks)?
[Select]
b. What is the total cost of the current ordering policy (including
the unit cost? [Select]
If Karen Powell, the owner, orders in quantities of 360 or more she
can get a 5% discount on the cost of the detectors.
c. What price should Acme pay per unit, considering the discount?
$ [Select]
d. What is the total cost at the discounted behavior? $
[Select]
e. What option should Karen Powell choose?
[Select]
XYZ company can manufacture their own products and sells them. They are able
to control the demand by changing the price that is determined by the equation
below. The company is thinking of maximizing their profit. The fixed cost is
$1,000 per month and the variable cost is $40 per unit. Find the number of units
that must be manufactured and sold monthly to maximize profit. (Demand D in
the equation is monthly) Hint: Profit = Total Revenue - Total Cost
2,700
5,000
p = $38 +
D
for D > 1
D2
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Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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