
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Transcribed Image Text:PS.55 Four Corners is an IBC company that sells delicious Navajo tacos in the Crossroads Food Court. Part of their success can be attributed to the freshly
fried Indian bread that is used not only for the tacos, but also for dessert items. As demand grows the fry-bread process is becoming a bottleneck. Operations
management for the company is looking at two different process options to replace the highly manual process currently being used. Option 1 (medium
automation) would cost $180 to implement whereas Option 2 (high automation) would cost $365. With Option 1 the variable cost per fry bread produced
would be $0.24. The variable cost for Option 2 would be $0.07 per fry bread.
At what volume (demand) of fry breads is the cost for the two options the same? (Display your answer to two decimal places.) Number
What is the total cost for either option at this break-even volume (answered in the last question)? (Display your answer to two decimal places.)
Number
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