2) Assume that your widget manufacturing company has a total annual demand of N widgets per...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2) Assume that your widget manufacturing company has a total annual demand of N widgets per year evenly distributed across the year. Each widget cost $b dollars in material and manufacturing costs to make. Every time you do a production run to make some widgets, you incur a set-up cost of P dollars. Any widgets awaiting sale must be stored and thus incur an average storage fee of c dollars per widget per year. Let x be the size of each production run (i.e., x is the number of widgets per production run). a) Write a cost function C(x) and explain each term in the equation and how it was determined. b) Write down any constraints on the allowable values of x. c) Determine a formula for the value of x that minimizes total annual cost. Show all of your work. d) Prove that your formula actually corresponds to the global minimum cost. e) Write down a formula for the number of production runs per year as a function of x. 2) Assume that your widget manufacturing company has a total annual demand of N widgets per year evenly distributed across the year. Each widget cost $b dollars in material and manufacturing costs to make. Every time you do a production run to make some widgets, you incur a set-up cost of P dollars. Any widgets awaiting sale must be stored and thus incur an average storage fee of c dollars per widget per year. Let x be the size of each production run (i.e., x is the number of widgets per production run). a) Write a cost function C(x) and explain each term in the equation and how it was determined. b) Write down any constraints on the allowable values of x. c) Determine a formula for the value of x that minimizes total annual cost. Show all of your work. d) Prove that your formula actually corresponds to the global minimum cost. e) Write down a formula for the number of production runs per year as a function of x.
Expert Answer:
Related Book For
The Economics Of The Environment
ISBN: 9780321321664
1st Edition
Authors: Peter Berck, Gloria Helfand
Posted Date:
Students also viewed these marketing questions
-
You are given the following data on the manufacturing operations of the entity for August, 2020: In process, August 1 (8,000 units, 25% done) Factory costs: Material cost P 2.100 21,000 Labor cost...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Terminology Key: Key Word List Describe Explain What to do In bulleted, numbered or paragraph form, provide a number of consecutive items-if paragraph form, use commas (,) to separate items In...
-
A spiro ring junction is one where two rings that share no bonds originate from a single carbon atom. Alkanes containing such a ring junction are called spiranes. (a) For the case of bicyclic...
-
In terms of the Federal income and transfer taxes, comment on what is accomplished in the following disclaimer situations occurring in 2017. a. Lester dies without a will and is survived by a...
-
In Example 12.17, we discussed a high school, which holds end-of-course exams in (E3) English 3, (E4) English 4, (M) Advanced Math, (C) Calculus, (W) World History, (U) U.S. History, (B) Biology, and...
-
The following audit procedures are concerned with tests of details of general cash balances: 1. Obtain a standard bank confirmation from each bank with which the client does business. 2. Compare the...
-
C webassign.net/web/Student/Assignment-Responses/last?dep=29546052 Math 110 Course Resources - Curve Sketching Course Packet on relative extrema - Curve Sketching Course Packet on critical points The...
-
Refer to the Lincolnville School District bus data. First, add a variable to change the type of engine (diesel or gasoline) to a qualitative variable. If the engine type is diesel, then set the...
-
capacity plan
-
Common stock is valued at $1,000,000 and costs $0.20. Bonds are valued at $850,000 and cost $0.04. Preferred stock is valued at $500,000 and costs $0.06. The tax rate is 40%. What is the pre-tax WACC?
-
Enter the name of the nation VIETNAM , then click on "Government" to find some helpful, basic information.From there, I recommend visiting theofficial governmentwebsite of the court system in the...
-
You work for boise cascade Corporation. Each month, a 15% federal income tax and a 5.06% provincial income tax are withheld from your paycheque. Your financial Advisor suggests that you increase the...
-
If the expected return on an asset A is 10%, on an asset B it is 8% and on an asset C it is 6%; What is the return on the portfolio made up of 20% of asset A, 35% of asset B and 45% of asset % of...
-
John Lemon, a fund manager currently holds $100 million par value of Treasury note T-A. He is worried that the interest rate might increase in the near future thus thinking of hedging his position...
-
Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. Required: a. Assume that only one product is being sold in each of the four following...
-
g(x) = x 5 5x 6 a. Show that g(x) = 0 has a root, , between x = 1 and x = 2. b. Show that the equation g(x) = 0 can be written as x = (px + q) 1/r , where p, q and r are integers to be found. The...
-
The idea underlying "pollution prevention" is that, rather than reduce pollution after it is created, businesses should avoid creation of pollution in the first place by using less polluting inputs...
-
Redwood National Park in northern California contains the tallest known redwood tree, as well as a remnant of the coastal redwood ecotype that once dominated coastal California. It does not receive...
-
Consider the market for purchase of new cars. (a) What factors likely influence the demand for cars? That is, either for an individual or in the aggregate, what factors will cause either movements...
-
What is the difference between organizational behavior study and organizational theory?
-
Why did the Industrial Revolution in the late 1800s affect work relationships so greatly?
-
Prepare an inventory, purchases, and cost of goods sold budget (Learning} Objective 2) University Logos buys logo-imprinted merchandise and then sells it to university bookstores. Sales are expected...
Study smarter with the SolutionInn App