An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus
The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit.
a. If the company produced 20,000 units, what would be its cost under each of the three choices?
b. Which process offers the lowest cost to produce 40,000 units? What is that cost?
(a) at 20,000 units, the costs are: small intermittent = $203,000; large intermittent = $52,000; and repetitive = $70,000 (b) at 40,000 units, repetitive process is cheapest, at $90,000 (small intermittent = $403,000, and large intermittent = $92,000).
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The average days to sell inventory is computed by dividing
a. 365 days by the inventory turnover ratio. b. the inventory turnover ratio by 365 days. c. net sales by the inventory turnover ratio. d. 365 days by cost of goods sold.
Which of the following is an example of a best-cost provider strategy?
A) Different car manufacturers compete in the tiny super car category with prices starting at $150,000 and running as high as $600,000. B) Aerodoungle's Eridla brand is considered a luxury car. Some of Eridla's models like the ES model, however, are in the midrange of prices for cars. C) Global furniture retailer Rusicwood provides customers with affordable solutions for better living by offering home furnishings that combine good design, function, and quality with low prices. D) Wild Hog builds motorcycles that target only the high end of the heavyweight market-the high-end premium cruiser market-with names such as Wolf, Mastiff, and Bulldog. E) Streetsuit's everyday low prices (EDLP) strategy hinges upon its ability to obtain consumer goods at the cheapest possible price and pass these savings on to consumers.