Chapter 7 9e Solutions, O&M by Heizer

CHAPTER 7

END-OF-CHAPTER PROBLEMS

7.5 [pic]

7.6 [pic]

7.7 [pic]

[pic]

7.8 [pic]. Thus, [pic]

7.9 [pic]. Thus, [pic]

|7.10 |[pic] |

7.12 Design: [pic]

Fabrication: [pic]

Finishing: [pic]

|7.15 |[pic] |

Prefer to build a large line. Large line has a payoff of $200,000. Small line has a payoff of [pic].

7.16 (a) Proposal A breakeven in units is:

[pic]

(b) Proposal B breakeven in units is:

[pic]

7.17 (a) Proposal A breakeven in dollars is:

[pic]

(b) Proposal B breakeven in dollars is:

[pic]

7.18 Set Proposal A to Proposal B

[pic]

7.19 (a) Proposal A: Profit at 8,500 units

[pic]

[pic]

Proposal A is best.

| |(b) |[pic] |

| | |Proposal B is best. |

7.20 Given:

[pic]

(a) Breakeven in units is given by:

[pic]

(b) Breakeven in dollars is given by:

[pic]

(c) Profit is given by:

[pic]

7.21 Given:

[pic]

Breakeven is given by:

[pic]

7.22 Given:

[pic]

Breakeven is given by:

[pic]

7.23 Given:

[pic]

Breakeven is given by:

(a) [pic]

(b) [pic]

7.24 Option A: Stay as is

Option B: Add new equipment

[pic]

Therefore, the company should stay with the present equipment.

7.25 Option A: Stay as is

Option B: Add new equipment, raise selling price

[pic]

Therefore, the company should choose option B: add the new equipment and raise the selling price.

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