Breakeven Analysis and Factor Ratings
Exam 1
- A 2-man crew made 180 widgets in 10 hours, while a 3-man crew made 120 widgets in 4 hours, and a 5-man crew made 110 widgets in 2 hours. What is each crew’s productivity as measured by widgets per man-hrs?
- Kleen Karpets cleaned 5000 square feet of rugs last month, consuming 400 hours of labor at $10 per hour, 100 gallons of solvent at $5 per gallon, and 20 days of machine rental at $25 per day. What is the multifactor productivity for the month as measured by square feet of rugs per dollar spent? 3. Mitch just built 4 franchise locations for his newest pizzerias and wants to decide where to put his headquarters. He makes 1 weekly visit to his Northside store (X = 3, Y = 10), 2 visits to his Eastside store (X = 4, Y = 6), 3 visits to his Southside store (X = 2, Y = 5) and 4 visits to his Westside store (X = 1, Y = 4). Using the coordinates along with the number of weekly visits as weights, compute the coordinates of the center of gravity to help him with his location decision. 4. In deciding on where to locate their next grocery store, Publix narrowed it down to 3 locations (St. Augustine, the Airport area, or the Westside). They are using 2 criteria to make their decisions costs (with a weight of 70%) and customer base (with a weight of 30%). Each item was scored on a 10-point scale with 10 being the highest. St. Augustine rated a score of 4 for cost and 10 for customer base; the Airport area rated a score of 6 for cost and 5 for customer
- Mitch just built 4 franchise locations for his newest pizzerias and wants to decide where to put his headquarters. He makes 1 weekly visit to his Northside store (X = 3, Y = 10), 2 visits to his Eastside store (X = 4, Y = 6), 3 visits to his Southside store (X = 2, Y = 5) and 4 visits to his Westside store (X = 1, Y = 4). Using the coordinates along with the number of weekly visits as weights, compute the coordinates of the center of gravity to help him with his location decision. 4. In deciding on where to locate their next grocery store, Publix narrowed it down to 3 locations (St. Augustine, the Airport area, or the Westside). They are using 2 criteria to make their decisions costs (with a weight of 70%) and customer base (with a weight of 30%). Each item was scored on a 10-point scale with 10 being the highest. St. Augustine rated a score of 4 for cost and 10 for customer base; the Airport area rated a score of 6 for cost and 5 for customer
- In deciding on where to locate their next grocery store, Publix narrowed it down to 3 locations (St. Augustine, the Airport area, or the Westside). They are using 2 criteria to make their decisions costs (with a weight of 70%) and customer base (with a weight of 30%). Each item was scored on a 10-point scale with 10 being the highest. St. Augustine rated a score of 4 for cost and 10 for customer base; the Airport area rated a score of 6 for cost and 5 for customer base; and the Westside rated a score of 8 for cost and 2 for customer base. Compute the mean score for each of the 3 locations. 5. Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient’s blood analyzed, while the actual cost of a blood analysis would be $5.00. What would be his profit if he were to perform 5,000 HIV blood analyses? 6. A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location? 7. The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs? 8. The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- Doctor J. is considering purchasing a new blood analysis machine to test for HIV; it will cost $60,000. He estimates that he could charge $25.00 for an office visit to have a patient’s blood analyzed, while the actual cost of a blood analysis would be $5.00. What would be his profit if he were to perform 5,000 HIV blood analyses? 6. A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location? 7. The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs? 8. The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location? 7. The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs? 8. The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs? 8. The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to break even at this new location? 7. The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs? 8. The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added
- The Career Institute is considering adding a new program in cooking. To offer such a program would cost a combined $100,000 in equipment costs and additional salaries (both of these are fixed costs). For every student enrolled they incur a materials cost of $300 (this is variable). They expect at least 200 enrollments in the program. To assure they at least break even at 200 enrollments, what is the minimum annual tuition they can charge in the cooking programs?
- The manager of a fast-food restaurant featuring hamburgers is adding salads to the menu. If they choose to include a salad bar (i.e., the MAKE option), it will cost $14,000 in annual fixed costs for the leased equipment and added employee, and $1 per salad variable cost. If they choose to have pre-made salads (i.e., the BUY option), it will cost $3 per salad. The manager expects to sell 7,500 salads per year. What is the make or buy quantity (i.e., the breakeven point between making vs. buying)?
- The first day of basic training at the Air Force Academy is quite a sight, with 1500 cadets being processed in. This involves getting haircuts, uniforms, room assignments, and a mountain of paperwork. At the Uniform Fitting station, the worker takes the measurements on the cadet (which takes about 2 minutes), then retrieves shirts, pants and hats in his/her size (which takes about 2 minutes), waits for the cadet to try on the pants (which takes about 1 minute) and then marks the pants for hemming (which takes about 1 minute). The in-processing takes place from 8 AM to 5 PM with an hour off for lunch (8 hours). How many cadets can a single worker fit for uniforms on that hectic day? How many workers would be needed to fit 1601 cadets in one day, if everyone works at full capacity?
- You have 3 machines that can make each 10 blankets per hour, and you run them for 8 hours per day, 5 days per week. Weekly customer demand is 1963 blankets. What is the weekly capacity for a single machine? How many additional machines would you need to be able to meet the customer demand for blankets?
- The local office supply store sells 600 reams of printer paper each year. It costs them $3 to order more paper and it costs $1 per ream to store the paper. The store operates 300 days per year, and an order takes 3 days to arrive. How many reams of paper should be in each order (i.e. the EOQ)? What is the REORDER POINT at which they should place new orders?
- A manufacturer must choose between locating in Atlanta (fixed cost of $60,000 / year and variable cost of $25 per unit) or Denver (fixed cost of $80,000 / year and variable cost of $20 per unit). If the manufacturer plans to produce 5,000 units, where should they locate the facility? What is the point of indifference between the two locations (i.e., where both facilities are equal in cost)?
- The management of a factory is going to erect a maintenance building. Given the following table of activities and times, determine the critical path and duration. Activity Description Predecessor Duration (weeks) a Evacuate — 2 b Erect building a 6 c Install generator a 4 d Install tank a 2 e Install maintenance equipment b 4 f Connect generator to building b, c, d 3 g Paint on a finish b 6 h Check out facility e, f 2
- Based on the Quantity Discount output below, what is the computed EOQ? __________ _______Range Total Quantity Total Cost 1 to 999 348 $83,919 1,000 to 2,999 1,000 $82,932 3,000 to 5,999 3,000 $84,185 6,000 or more 6,000 $87,030
- Answer the questions that follow based on the output below (note: times are in weeks). __________
- What steps comprise the “critical path”? __________
- What is the minimum completion time? __________
- What is the probability of completing the project in less than 30 weeks? __________
- If TASK B can be completed in half the time for a small fee, would it be worthwhile to consider paying for it? (YES or NO)
