Operation Management

OPERATION MANAGEMENT

Q1

factor | Weight | Site Scores | Factors Weighted By Its Importance |

| | A | B | C | D | A | B | C | D |

Quality laborConstruction CostTransportation CostsProximity to marketsTaxesWeatherEnergy Costs | 10887665 | 523522(4)5 | 4343354 | 4434353 | 5124443(5) | 50 | 40 | 40 | 50 |

| | | | | | 16 | 24 | 32 | 8 |

| | | | | | 24 | 32 | 24 | 16 |

| | | | | | 35 | 21 | 28 | 28 |

| | | | | | 12 | 18 | 18 | 24 |

| | | | | | 12(24) | 30 | 30 | 24 |

| | | | | | 25 | 20 | 15 | 15(25) |

| | | | | | 174(186) | 185 | 187 | 165(175) |

a) Tracy should choose site C

b) No

c) Tracy should still choose site C

Q2

a) Break-even point in dollar

(BEP$) = Fixed Cost (F)1-Variable Cost (V)Selling Price (P)

= 15,0001-0.010.05

=15,0001-0.2

=15,0000.8

= $18,750.00

b) Break-even point in unit

(BEPunit) = Fixed Cost (F)Selling PriceP-Variablecost(V)

= 15,0000.05-0.01

= 15,0000.04

= 375,000copy

Q3

a) Bottleneck is Workstation C

b) Hourly capacity for the process = 60mins20mins

=3mins/unit

Q4

Site | Fixed cost per year ($) | Variable cost per unit($) |

123 | 5001,0001,700 | 1174 |

a) Site 1:

500 + 11Q = 1000 + 7Q

11Q - 7Q = 1000 - 500

4Q = 500

Q =5004

= 125units

∴Site 1 is optimal up to 125 units.

Site 2:

1000 + 7Q = 1700 + 4Q

7Q - 4Q = 1700 - 1000

3Q = 700

Q =7003

= 233units

∴Site 2 is optimal from 125 units- 233 units.

Site 3 is optimal above 233 units.

b) For production of 200 units, Site 2 is the best as site 2 is optimal from 125 units – 233 units.

Q5

Labor cost per unit = Labor cost per dayProduction (units per day)

Cambodia:...