A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is providedbelow:For in-house manufacturing:For purchasing from supplier:Purchase price per part = $180a. For this information, use the Break-Even Excel template in MindTap to find the best decision if the demand is 6,000. Round your answers to thenearest dollar.Annual fixed cost = $100,000Variable cost per part = $140Total cost of production: $Total cost of outsourcing: $The best decision is to manufacture in-houseb. Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use theExcel Goal Seek tool. Round your answer to the nearest whole number.10000 parts220000350000 Profitability AnalysisCostRevenueQuantity10,000Fixed cost $100,000.00Unit cost$12.00Unit revenue$20.00Total Cost $220,000.00Total RevenueNet ProfitProfit or LossOutsourcing DecisionProduce In-HouseOutsourceQuantity 12,000Fixed cost 250,000.00Unit cost$20.00Fixed costUnit cost $35.00Technology Choice DecisionOption AOption BQuantity11,000Fixed cost $200,000.00Unit cost$18.60Fixed cost $100,000.00Unit cost$21.00Total In-House Production Cost 190,000.00$200,000.00Total Outsourced Cost 120,000.00-$20,000.00 Cost difference (In-House - Outsourced $70,000.00 Cost difference (Option A - Option B)LossEconomical Decision OutsourceEconomical DecisionTotal Cost Option A $404,600.00Total Cost Option B $331,000.00$73,600.00Option B

In-House manufacturingFixed Cost100000per yearVariable Cost140per tonOutsourcePurchase Price180per…

Answered: A firm is evaluating the alternative of…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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The Vera Molding company has two alternatives for meeting a customer requirement for 9,500 units of a specialty molding. If done in-house, fixed cost would be $300,000 with variable cost at $40 per unit. Alternative two is to outsource for a total cost of $80 per unit. What is the break-even quantity? Round your answer to the nearest whole number. units Should the firm make the 9,500 units in-house or outsource? Firm should produce the molding .
Soft Key is trying to determine how best to produce its newest product, DVORK keyboards. The keyboards could be produced in house using either Process A or Process B or purchased from a supplier. For what levels of demand should each process be chosen? O O Fixed Cost Variable Cost per unit Process A $8,000 $10 Process B $20,000 $4 A From 0-800 Supplier, From 800 to 2000 Process A, From 2000 to infinity Process B Supplier $0 $20 B From 0-800 Process A, From 800-2000 Process B, From 20000 to infinity Supplier C From 0-2000 Supplier, From 2000 to infinity Process B, and Never Process A D From 0-2000 Process A, From 2000 to infinity Process B, and Never Supplier E Always use Supplier, Never use Process A, Never use Process B ד ח
Doing a value chain analysis is a fantastic way of following a process to review all of the ways you can generate value for your customers. Based on the following information, students are required to create/draw (infographic) value chain to the identified organization below. PIZZA HUTLet’s look at the value chain of Pizza Hut:PRIMARY ACTIVITIESInbound logistics: This includes all of the sourcing activities to procure and standardize all of the produce, ingredients and materials to bake pizza’s fast, consistently, and delicious – in house. They capitalize on economies of scale, and use massive global purchase orders to source the best prices on raw products for their restaurants.Operations: By targeting areas where there is an affinity for Italian food, Pizza Hut operates in a huge number of countries globally with a licensing model where stores are managed by a local franchise owner.Outbound logistics: There are two models that Pizza Hut capitalizes on, in store dining and their home…
The Vera Molding company has two alternatives for meeting a customer requirement for 7,500 units of a specialty molding. If done in-house, fixed cost would be $200,000 with variable cost at $32 per unit. Alternative two is to outsource for a total cost of $78 per unit. What is the break-even quantity? Round your answer to the nearest whole number. _________ units Should the firm make-in-house or outsource? Round your answers to the nearest dollar. Total cost if done in-house: $ ________________ Total cost if outsourced: $ ________________ So, the firm can save $ ____________ by producing in- house. A company has two alternatives for meeting a customer requirement for 8,000 units of a specialty molding. If done in-house, fixed cost would be $345,000 with variable cost at $35 per unit. Alternative two is to outsource for a total cost of $80 per unit. Determine the break-even point. Round your answer to the nearest whole number. ______________ units Determine if they should…
A company has two alternatives for meeting a customer requirement for 830,000 units of a part used in office printers. done in-house, fixed cost would be $1,400,000 with variable cost at $2.40 per unit. Alternative two is to outsource for a total cost of $3.20 per unit. Determine the break-even point. Round your answer to the nearest whole number. units Determine if they should make the item in-house or outsource it. Round your answers to the nearest dollar. Total cost done in-house: $ Total cost if outsourced: $ So, the company should -Select- Select do the work in-house outsource the work and save $
Two items are omitted from each of the following three lists of cost of goods sold data from a manufacturing company income statement. Determine the amounts of the missing items, identifying them by letter. Finished goods Inventory,June1 $61,600 $46,200 (e) Cost of goods manufactured 329,000 (c ) 484,800 Cost of finished goods available for sales (a) $260,400 $540,000 Finished goods Inventory ,June30 72,800 61,600 (f) Cost of goods sold (b) (d) $513,600
discuss the various activities both from the purchasing and supplying perspective and with a simple diagramdescribe how goods move from the supplier of raw materials through to the customer.
Give three examples of services you are familiar with that include all of the following: there is an intangible portion to the offering, it is time-perishable, and it involves the customer as co-producer. Explain your answers.
How is the source at Ashley furniture? Source:It includes the selection of suppliers that will deliver the goods and services to create the company's product.
Draw the “bricks and mortar” process stages of the value chain by which hard copy books are created, produced, distributed, and sold in retail stores. How does each player in the value chain make money? (Hint: You can use the exhibits in previous chapters, such as Exhibit 1.4, to help you identify major stages in the value chain. The value chain begins with suppliers.) Draw the process stages for creating and downloading an e-book today. How does each player in this new electronic/digital value chain make money? Compare and contrast value chain design and structure in the previous two questions from customer and management viewpoints. What are the advantages and disadvantages to each value chain design? What is the role of operations in each of these value chain designs and structures?
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A furniture manufacturer is assessing whether it should make or buy the wooden frames for upholstered dining room chairs. The forecast is for 100,000 chairs to be produced per year. The fixed costs per year to make the frames are $150,000 and the variable costs are $5 per frame. The supplier's bid is $8 per frame. a. Compute the total annual cost for insourcing and outsourcing the chair frames. b. Which option would you prefer?

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