Matthew Bailey, as manager of Designs by Bailey,is upgrading his CAD software. The high-performance (HP)software rents for $3,000 per month per workstation. Thestandard-performance (SP) software rents for $2,000 per monthper workstation. The productivity figures that he has availablesuggest that the HP software is faster for his kind of design.Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translates into a vari-able cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 draw-ings per month, which system should he rent?

Matthew Bailey, as manager of Designs by Bailey,is upgrading his CAD software. The high-performance (HP)software rents for $3,000 per month per workstation. Thestandard-performance (SP) software rents for $2,000 per monthper workstation. The productivity figures that he has availablesuggest that the HP software is faster for his kind of design.Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translates into a vari-able cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 draw-ings per month, which system should he rent?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Matthew Bailey, as manager of Designs by Bailey,is upgrading his CAD software. The high-performance (HP)software rents for $3,000 per month per workstation. Thestandard-performance (SP) software rents for $2,000 permonth per workstation. The productivity figures that he hasavailable suggest that the HP software is faster for his kind ofdesign. Therefore, with the HP software he will need five engineers and with the SP software he will need six. This translatesinto a variable cost of $200 per drawing for the HP system and$240 per drawing for the SP system. At his projected volumeof 80 drawings per month, which system should he rent?
McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three designs, called designs K1, K2, and K3, are under consideration. No matter which design is used, daily production of sandwiches at a typical McBurger restaurant is for 600 sandwiches. A sandwich costs $1.30 to produce. Non-defective sandwiches sell, on the average, for $2.50 per sandwich. Defective sandwiches cannot be sold and are scrapped. The goal is to choose a design that maximizes the expected profit at a typical restaurant over a 300-day period. Designs K1, K2, and K3 cost $115,000, $140,000, and $170,000, respectively. Under design K1, there is a .80 chance that 90 out of each 100 sandwiches are non-defective and a .20 chance that 70 out of each 100 sandwiches are non-defective. Under design K2, there is a .85 chance that 90 out of each 100 sandwiches are non-defective and a .15 chance that 75 out of each 100 sandwiches are non-defective. Under design K3, there is a…
McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three designs, called designs K1, K2, and K3, are under consideration. No matter which design is used, daily production of sandwiches at a typical McBurger restaurant is for 500 sandwiches. A sandwich costs $1.30 to produce. Non-defective sandwiches sell, on the average, for $2.50 per sandwich. Defective sandwiches cannot be sold and are scrapped. The goal is to choose a design that maximizes the expected profit at a typical restaurant over a 300-day period. Designs K1, K2, and K3 cost $80,000, $100,000, and $140,000, respectively. Under design K1, there is a .80 chance that 90 out of each 100 sandwiches are non-defective and a .20 chance that 70 out of each 100 sandwiches are non-defective. Under design K2, there is a .85 chance that 90 out of each 100 sandwiches are non-defective and a .15 chance that 75 out of each 100 sandwiches are non-defective. Under design K3, there is a .90 chance that 95 out…
2) Paige Vincent is the RM at the City Center Novotel. For over 12 months, she has been working hard to improve the performance of her hotel. Paige just received the following performance data. Help her understand the revenue optimization trends for her property by completing the chart. Then, you will be asked to evaluate her efforts. City Center Novotel Performance: Occupancy % Novotel Comp Set Index This month 57.2 58.1 Last 3 months 55.1 57.7 Last 12 months 51.3 55.6 ADR This month $266.57 $270.15 Last 3 months $244.91 $269.69 Last 12 months $231.45 $268.95 RevPAR This month Last 3 months Last 12 months
Prepare a product-by-value analysis for the fol- lowing products, and given the position in its life cycle, iden- tify the issues likely to confront the operations manager and his or her possible actions. Product Alpha has annual sales of 1,000 units and a contribution of $2,500; it is in the intro- ductory stage. Product Bravo has annual sales of 1,500 units and a contribution of $3,000; it is in the growth stage. Product Charlie has annual sales of 3,500 units and a contribution of $1,750; it is in the decline stage.
McBurger, Inc., wants to redesign its kitchensto improve productivity and quality. Three designs, calleddesigns K1, K2, and K3, are under consideration. No matterwhich design is used, daily production of sandwiches at a typi-cal McBurger restaurant is for 500 sandwiches. A sandwichcosts $1.30 to produce. Non-defective sandwiches sell, on theaverage, for $2.50 per sandwich. Defective sandwiches cannotbe sold and are scrapped. The goal is to choose a design thatmaximizes the expected profit at a typical restaurant overa 300-day period. Designs K1, K2, and K3 cost $100,000,$130,000, and $180,000, respectively. Under design K1, thereis a .80 chance that 90 out of each 100 sandwiches are non-defective and a .20 chance that 70 out of each 100 sandwichesare non-defective. Under design K2, there is a .85 chance that90 out of each 100 sandwiches are non-defective and a .15chance that 75 out of each 100 sandwiches are non-defective.Under design K3, there is a .90 chance that 95 out of each…
Cox Electric makes electronic components and has estimated the following for a new design of one of its products. . Fixed cost-$21,000 • Material cost per unit $0.17 Labor cost per unit = $0.11 Revenue per unit $0.68 Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all that it produces, profit is calculated by subtracting the fixed cost and total variable cost from total revenue. Construct an appropriate spreadsheet model to find the profit based on a given production level and use the spreadsheet model to answer these questions. (a) Construct a one-way data table with production volume as the column input and profit as the output. Breakeven occurs when profit goes from a negative to a positive value; that is, breakeven is when total revenue the total cost, yielding a profit of zero. Vary production volume from 0 to 100,000 in increments of 10,000. In which…
Explain what quality function deployment is and how it can be useful.
a. distinguish between systems design and systems quality. what challenges are there? b. describe the relationship between design capacity, system capacity, and actual output. how can you ensure a projected output is within the boundaries of the design capacity and system capacity?
As operations manager of Holz Furniture, you must make a decision about adding a line of rustic furniture. In discussing the possibilities with your sales manager, Steve Gilbert, you decide that there will definitely be a market and that your firm should enter that market. However, because rustic furniture has a different finish than your standard offering, you decide you need another process line. There is no doubt in your mind about the decision, and you are sure that you should have a second process. But you do question how large to make it. A large process line is going to cost $425,000; a small process line will cost $300,000. The question, therefore, is the demand for rustic furniture. After extensive discussion with Mr. Gilbert and Rosalita Ferrera of Ferrera Market Research, Inc., you determine that the best estimate you can make is that there is a two-out-of-three chance of profit from sales as large as $625,000 and a one-out-of-three chance as low as $350,000. With a large…
As operations manager of Holz Furniture, you must make a decision about adding a line of rustic furniture. In discussing the possibilities with your sales manager, Steve Gilbert, you decide that there will definitely be a market and that your firm should enter that market. However, because rustic furniture has a different finish than your standard offering, you decide you need another process line. There is no doubt in your mind about the decision, and you are sure that you should have a second process. But you do question how large to make it. A large process line is going to cost $425,000; a small process line will cost $350,000. The question, therefore, is the demand for rustic furniture. After extensive discussion with Mr. Gilbert and Rosalita Ferrera of Ferrera Market Research, Inc., you determine that the best estimate you can make is that there is a two-out-of-three chance of high demand resulting in $600,000 profit from sales and a one-out-of-three chance of low demand…
As operations manager of Holz Furniture, you must make a decision about adding a line of rustic furniture. In discussing the possibilities with your sales manager, Steve Gilbert, you decide that there will definitely be a market and that your firm should enter that market. However, because rustic furniture has a different finish than your standard offering, you decide you need another process line. There is no doubt in your mind about the decision, and you are sure that you should have a second process. But you do question how large to make it. A large process line is going to cost $425,000; a small process line will cost $350,000. The question, therefore, is the demand for rustic furniture. After extensive discussion with Mr. Gilbert and Rosalita Ferrera of Ferrera Market Research, Inc., you determine that the best estimate you can make is that there is a two-out-of-three chance of high demand resulting in $600,000 profit from sales and a one-out-of-three chance of low demand…