Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 7, Problem 5PA
Sarah’s Organic Soap Company makes four kinds of organic liquid soap: “regular,” “lavender,” “citrus,” and “tea tree.” Demands for the four scents are 150, 120, 75, and 50 kgs per hour, respectively. Sarah’s production process can produce any soap at the rate of 450 kgs per hour, but 1.5 hours are needed to switch between scents. During those switchover times, the process doesn’t produce any soap. Sarah’s wants to choose a production
- a. Suppose Sarah’s produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. How much soap (kgs) can Sarah’s produce per hour?
- b. Suppose Sarah’s produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. What is the utilization (%) of the process?
- c. Suppose Sarah’s produces 12,000 kgs of regular, 9600 kgs of lavender, 6000 kgs of citrus, and 4000 kgs of tea tree per batch. How much inventory (kgs) do they have on average of lavender soap?
- d. How many kgs of “regular” should Sarah’s produce before switching over to another scent?
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. Sarah’s Organic Soap Company makes four kinds of organic liquid soap: “regular,”“lavender,” “citrus,” and “tea tree.” Demands for the four scents are 150, 120, 75, and50 kgs per hour, respectively. Sarah’s production process can produce any soap at therate of 450 kgs per hour, but 1.5 hours are needed to switch between scents. Duringthose switchover times, the process doesn’t produce any soap. Sarah wants to choosea production schedule that (i) cycles repeatedly through the four scents, (ii) meets therequired demand, and (iii) minimizes the amount of inventory held.How many kgs of “regular” should Sarah produce before switching over to another scent?
Atlanta Manufacturing Company produces products W, X, Y, and Z through a joint
process. The joint costs amount to $250,000.
Product
Units
Produced
Sales Value
at Split-Off
Additional Costs
of Processing
Sales Value
After Processing
W
750
$10,000
$2,500
$15,000
X
1,500
$30,000
$3,000
$35,000
Y
1,000
$20,000
$4,000
$25,000
Z
1,500
$40,000
$6,000
$45,000
If W is processed further, profits of W will:
1) Increase by $2,500
2) Increase by $12,500
3) Decrease by $23,000
4) Increase by $5,000
Relevant Costs and Quality Improvement Lightening Bulk Company is a moving companyspecializing in transporting large items worldwide. The firm has an 85% on-time delivery rate.Thirteen percent of the items are misplaced and the remaining 2% are lost in shipping. On average,the firm incurs an additional $65 per item to track down and deliver misplaced items. Lost items costthe firm about $300 per item. Last year, the firm shipped 6,000 items with an average freight bill of$200 per item shipped.The firm’s manager is considering investing in a new scheduling and tracking system costing$125,000 per year. The new system is expected to reduce misplaced items to 1% and lost items to0.5%. Furthermore, the firm expects total sales to increase by 10% with the improved service. Theaverage contribution margin ratio on any increased sales volume, after cost savings associated witha reduction in misplaced and lost items, is expected to be 37.5%.Required1. Based on a relevant cost analysis, should…
Chapter 7 Solutions
Operations Management
Ch. 7 - Prob. 1CQCh. 7 - Prob. 2CQCh. 7 - Prob. 3CQCh. 7 - Prob. 4CQCh. 7 - Prob. 5CQCh. 7 - Prob. 6CQCh. 7 - Prob. 7CQCh. 7 - Prob. 8CQCh. 7 - Prob. 9CQCh. 7 - Prob. 10CQ
Ch. 7 - Prob. 11CQCh. 7 - Prob. 12CQCh. 7 - Prob. 13CQCh. 7 - Prob. 14CQCh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Sarahs Organic Soap Company makes four kinds of...Ch. 7 - Prob. 6PACh. 7 - Prob. 7PACh. 7 - Bruno Fruscalzo decided to set up a small...Ch. 7 - Prob. 9PACh. 7 - Prob. 10PACh. 7 - Prob. 1CCh. 7 - Prob. 2CCh. 7 - Prob. 3CCh. 7 - Prob. 4C
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