A manufacturing firm is considering the following data related to three process strategies for expanding its operations. General Purpose Equipment (GPE) Flexible Manufacturing System (FMS) 50,000 Dedicated Machine (DM) 50,000 Annual production level (units) Annual fixed cost (USD) 50,000 100,000 220,000 800,000 Per unit variable cost (USD) 21 14 What is the maximum value of the unit variable cost (rounded to the nearest whole number) of FMS that will not affect the optimal choice for this problem?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter4: Linear Programming Models
Section4.8: Data Envelopment Analysis (dea)
Problem 42P
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A manufacturing firm is considering the following data related to three process strategies for expanding its operations.
Flexible Manufacturing System (FMS)
Annual production level (units)
General Purpose Equipment (GPE)
50,000
Dedicated Machine (DM)
50,000
50,000
Annual fixed cost (USD)
100,000
220,000
800,000
Per unit variable cost (USD)
21
14
8.
What is the maximum value of the unit variable cost (rounded to the nearest whole number) of FMS that will not affect the optimal choice for this problem?
Transcribed Image Text:A manufacturing firm is considering the following data related to three process strategies for expanding its operations. Flexible Manufacturing System (FMS) Annual production level (units) General Purpose Equipment (GPE) 50,000 Dedicated Machine (DM) 50,000 50,000 Annual fixed cost (USD) 100,000 220,000 800,000 Per unit variable cost (USD) 21 14 8. What is the maximum value of the unit variable cost (rounded to the nearest whole number) of FMS that will not affect the optimal choice for this problem?
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