OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 11, Problem 3DQ
A school district has
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Using the accompanying log-log graph, answer the following questions:
What are the implications for management if it has forecast its cost on the optimum line?
What could be causing the fluctuations above the optimum line?
If management forecast the tenth unit on the optimum line, what was that forecast in hours?
If management built the tenth unit as indicated by the actual line, how many hours did it take?
Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background
check in-house for $1.95 per search with a fixed cost of $23,000. A third-party online security firm offered
to do a similar security search for $9.00 per person with an annual service contract with STE. If STE's
forecast is 2,900 searches next year, should STE continue to do the search in-house or accept the third-
party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for the
breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to
the nearest dollar.
Breakeven quantity:
Since the demand forecast of 2,900 searches is -Select-than the breakeven quantity, STE
-Select- ✓outsource the work. STE -Select- $
by outsourcing.
searches
Suzy's Temporary Employee (STE) business, located in a big city, can do an online criminal background check in-house for $3.48 per search with a fixed cost of $30,000. A third-party online security firm offered to do a similar security search for $9.00 per person with an annual service contract with STE. If STE's forecast is 3,100 searches next year, should STE continue to do the search in-house or accept the third-party offer? Use the Excel template Break-Even to determine the best decision. Round your answer for the breakeven quantity to the nearest whole number and round your answer for the amount of saving/loss to the nearest dollar.
Breakeven quantity: searches
Since the demand forecast of 3,100 searches is than the breakeven quantity, STE outsource the work. STE $ by outsourcing.
Chapter 11 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - A school district has forecast student enrollment...Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - SOP or aggregate planning sometimes is confused...Ch. 11 - The XYZ Company manufactures a seasonal product....Ch. 11 - Prob. 8DQCh. 11 - Every firm has multiple objectives such as good...Ch. 11 - Prob. 10DQ
Ch. 11 - Prob. 11DQCh. 11 - Suppose we are considering the question of how...Ch. 11 - The Ace Steel Mill estimates the demand for steel...Ch. 11 - A barbershop has the following demand for haircuts...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - eXcel The Chewy Candy Company would like to...Ch. 11 - A company produces to a seasonal demand, with the...Ch. 11 - Prob. 8PCh. 11 - Question: 9. The Restwell Motel in Orlando,...Ch. 11 - eXcel 10. The Ban go Toy Company produces several...Ch. 11 - A small textile company makes several types of...Ch. 11 - Valley View Hospital faces somewhat seasonal...
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