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2. The PSP manufactures and sells electronic products. It makes some of the parts and purchase others. The engineering department believes that it might be
2. The PSP manufactures and sells electronic products. It makes some of the parts and purchase others. The engineering department believes that it might be possible to cut cost manufacturing one of the parts that is currently being purchase for $8.25 each. The firm use 100,000 of these parts each year, and the accounting department compiles the following annual costs based on engineering estimates: Fixed costs will increase by $50.000 Labour costs will increase by $125,000 Factory overhead, currently running $500,000 per year, is expected to increase 12% Raw materials used to make the part will cost $600,000 . (a) Calculate the total manufacturing cost. What is the unit cost? (4 marks) (b) Should PSP make or buy the parts? Why? (2 marks) (C) PSP adopts Hill's framework to link between marketing and operations. What are the main components of Hill's framework? (4 marks) (d) The decision to make or buy is arguably the most fundamental component of manufacturing strategy. What are the advantages and disadvantage to buy or outsource? (7 marks) (e) Business strategy is a part of a business plan for product/brand and market. List the THREE (3) main strategy of the business for PSP. (3 marks) PSP needs to ensure good quality products and excellent services for their business. Briefly explain the FIVE (5) business benefits of sustainability. (5 marks) 2. The PSP manufactures and sells electronic products. It makes some of the parts and purchase others. The engineering department believes that it might be possible to cut cost manufacturing one of the parts that is currently being purchase for $8.25 each. The firm use 100,000 of these parts each year, and the accounting department compiles the following annual costs based on engineering estimates: Fixed costs will increase by $50.000 Labour costs will increase by $125,000 Factory overhead, currently running $500,000 per year, is expected to increase 12% Raw materials used to make the part will cost $600,000 . (a) Calculate the total manufacturing cost. What is the unit cost? (4 marks) (b) Should PSP make or buy the parts? Why? (2 marks) (C) PSP adopts Hill's framework to link between marketing and operations. What are the main components of Hill's framework? (4 marks) (d) The decision to make or buy is arguably the most fundamental component of manufacturing strategy. What are the advantages and disadvantage to buy or outsource? (7 marks) (e) Business strategy is a part of a business plan for product/brand and market. List the THREE (3) main strategy of the business for PSP. (3 marks) PSP needs to ensure good quality products and excellent services for their business. Briefly explain the FIVE (5) business benefits of sustainability
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