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Facility layout study. Facility layout and material flowpath design are major factors in the productivity analysis of automated manufacturing systems. Facility layout is concerned with the location arrangement of machines and buffers for work-in-process. Flowpath design is concerned with the direction of manufacturing material flows (e.g., unidirectional or bidirectional; Lee, Lei, and Pinedo. Annals of Operations Research, 1997). A manufacturer of printed circuit boards is interested in evaluating two alternative existing layout and flowpath designs. The output of each design was monitored for 8 consecutive working days. The data (shown here) are saved in the file. Design 2 appears to be superior to Design 1. Do you agree? Explain fully.
Working Days | Design 1 (units) | Design 2 (units) |
8/16 | 1,220 | 1,273 |
8/17 | 1,092 | 1,363 |
8/18 | 1,136 | 1,342 |
8/19 | 1,205 | 1,471 |
8/20 | 1,086 | 1,299 |
8/23 | 1,274 | 1,457 |
8/24 | 1,145 | 1,263 |
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Chapter 8 Solutions
EBK STATISTICS FOR BUSINESS AND ECONOMI
- A recent engineering was given the job of determining the best production rate for a new type of casting in a foundry. After experimenting with many combinations of hourly production rates and total production cost per hour, he summarized his findings in table below (column 2). The engineering then talked to the firm’s marketing specialist, who provided estimates of selling price per casting as a function of production output (see table 1 column 3). There are 8,760 hours in a year. What production rate would you recommend to maximize total profits per year? a) 100 ; b) 200 ; c) 300 ; d) 400 ; e) 500 Show handwritten solutions.arrow_forwardThe transition from economies of scale to dis economies of scale is more likely to occur in a manufacturing operation Select one: True Falsearrow_forwardCompare and contrast economies of scope and economies of scale. Be sure to include outside sources.arrow_forward
- Myrtle Beach, South Carolina, is lined with virtually identical motels. Summertime rates run about $250 a night. During the winter, rooms rent for as little as $70 a night. Assume the average fixed cost of a room per night, including insurance, taxes, and depreciation, is $30. The average guest-related cost (average variable cost) for a room each night, including cleaning service and linens, is $65. The average total cost, which is the sum of the average fixed cost ($30) and the average variable cost ($65), is $95. During the winter, these hotels should shut down until summer because they cannot cover all of their fixed costs. continue to operate despite operating at a loss because they are covering all of their variable cost and a portion of their fixed costs. continue to operate because they are earning a positive economic profit. shut down until summer because they are currently operating at a loss.arrow_forwardSeastrand Oil Company produces two grades of gasoline: regular and high octane. Both gasolines are produced by blending two types of crude oil. Although both types of crude oil contain the two important ingredients required to produce both gasolines, the percentage of important ingredients in each type of crude oil differs, as does the cost per gallon. The percentage of ingredients A and B in each type of crude oil and the cost per gallon are shown. Crude Oil Cost Ingredient A Ingredient B 1 $0.10 20% 60% 2 $0.15 50% 30% Each gallon of regular gasoline must contain at least 40% of ingredient A, whereas each gallon of high octane can contain at most 50% of ingredient B. Daily demand for regular and high-octane gasoline is 800,000 and 600,000 gallons, respectively. How many gallons of each type of crude oil should be used in the two gasolines to satisfy daily demand at a minimum cost? Round your answers to the nearest whole number. Round the answers for cost to the nearest…arrow_forwardQuestion 6 The estimation of a Cobb-Douglas production function for 20 firms of a given industry yields: = a. 16.907 + 0.322k; + 2.777lį R² = 0.915 DW = 2.032 RSS = 0.461 Use a = 5% Var ß = 0.166070 0.031857 0.216639 -0.857446 -0.057229 4.939971/ where : fitted values of naturals logaritrhms of output (output express in 1000 tons); ki: natural logaritrhms of capital output (output express in 1000 tons) li: natural logaritrhms of labour (labour is in hours) RSS: residual sum of squares 1: firm index Var ß: variance covariance matrix of estimates Evaluate the statistical significance of the coefficients. Page 4 of 12 b. A regression on the original regressors, q² and a constant term yields the following statistics: R² = 0.296041 F = 1.177507 coeff of ² has a t-statistic of 2.876 (i) With this information, which test can you implement to deal with the problem omitted variables and why? (ii) Implement the test as stated in b(i) and interpret the results. (iii) What is (are) the…arrow_forward
- There is economies of scale if the average cost of production is lower for bigger scale of operations compared to the average cost of production for smaller scale of operations True Falsearrow_forwardAssume you were hired as a Production Engineer in a global Bearing Manufacturer company and given the following inputs: Equipment Maintenance Cost per Month Utilities Cost per Month Material Cost per Unit Labor Cost per Unit Selling Price per Unit S60,000.00 $12,000.00 $12.00 $3.00 $24.00 Calculate Total Fixed Cost per Month = Calculate Total Variable Cost per Unit = Calculate number of Units to be sold to reach Break-Even Point = Calculate number of Units that must be sold to eam profit of $90,000.00 =arrow_forwardDanna Lumus, the marketing manager for a division that produces a variety of paper products, is considering the divisional manager's request for a sales forecast for a new line of paper napkins. The divisional manager has been gathering data so that he can choose between two different production processes. The first process would have a variable cost of $10 per case produced and total fixed cost of $100,000. The second process would have a variable cost of $6 per case and total fixed cost of $200,000. The selling price would be $30 per case. Danna had just completed a marketing analysis that projects annual sales of 30,000 cases. Danna is reluctant to report the 30,000 forecast to the divisional manager. She knows that the first process would be labor intensive, whereas the second would be largely automated with little labor and no requirement for an additional production supervisor. If the first process is chosen, Jerry Johnson, a good friend, will be appointed as the line supervisor.…arrow_forward
- A small plant manufactures riding lawn mowers. The plant has fixed costs (leases, insurance, and so on) of $24,000 per day and variable costs (labor, materials, and so on) of $1,200 per unit produced. The mowers are sold for $1,500 each. The cost and revenue equations are shown below where x is the total number of mowers produced and sold each day and the daily costs and revenue are in dollar y=24000 + 1200x Cost equation y= 1500x Revenue equation How many units must be manufactured and sold each day for the company to break even ?arrow_forwardProblem one You are a manager at Glass Inc. a mirror and window supplier. Recently, you conducted a study of the production process for your single-side encapsulated window. The results from the study are summarized below and are based on the eight units of capital currently available at your plant. Workers are paid $60 per unit, per unit capital costs are $20, and your encapsulated windows sell for $12 each. Given this information, optimize your human resource and production decisions. Do you anticipate earning a profit or loss? Explain carefully. Labor Output 0 0 1 10 2 30 3 60 4 80 5 90 6 95 7 95 8 90 9 80 10 60 11 30 Problem two You are the general manager of a firm that manufactures personal computers. Due to a soft economy, demand for PCs has dropped 50 percent from the previous year. The sales manager of your company has identified only one potential client, who has received several quotes for 10,000 new PCs. According to the sales…arrow_forwardFixed cost Variable cost No. of cupcake Total cost (FC+VC) $420 $2.10 1 $422.10 $420 $42.00 20 $462.00 $420 $84.00 40 $504.00 $420 $126.00 60 $546.00 $420 $168.00 80 $588.00 $420 $210.00 100 $630.00 TC = $420 + 2.1x R= 4.90(x) (I) Graph both functions on the same coordinate axes.(II) From your graph find coordinatae at which cost equals revenue.(III) Using your graph, determine how many cupcakes need to be made to produce revenueof at least $1,029.How much profit is made for this number of cupcakes?arrow_forward
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