Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 1, Problem 9P

The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s current daily labor cost is $320, the equipment cost is $125, and the overhead cost is $225. Daily demands, along with selling price and material costs per beverage, are given here:

Chapter 1, Problem 9P, The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s , example  1

Harald Luckerbauer, the manager at Morning Brew Coffee Shop, would like to understand how adding Eiskaffee (a German coffee beverage of chilled coffee, milk, sweetener, and vanilla ice cream) will alter the shop’s productivity. His market research shows that Eiskaffee will bring in new customers and not cannibalize current demand. Assuming that the new equipment is purchased before Eiskaffee is added to the menu, Harald has developed new average daily demand and cost projections. The new equipment cost is $200, and the overhead cost is $350. Modified daily demands, as well as selling price and material costs per beverage for the new product line, are given here:

Chapter 1, Problem 9P, The Morning Brew Coffee Shop sells Regular, Cappuccino, and Vienna blends of coffee. The shop’s , example  2

  1. Calculate the change in labor and multifactor productivity if Eiskaffee is added to the menu.
  2. If everything else remains unchanged, how many units of Eiskaffee would have to be sold to ensure that the multifactor productivity increases from its current level?

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