Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A mobile phone manufacturer is exploring ways to lower costs in its assembly process. The company is considering the purchase and installation of automated systems

A mobile phone manufacturer is exploring ways to lower costs in its assembly process. The company is considering the purchase and installation of automated systems to handle the phone battery installation, which could reduce labor, material, and energy costs. The cost of procuring and installing the automation equipment is $500,000, with an estimated useful life of 3 years. A full-time technician will be required for ongoing maintenance and programming at a cost of $65,000 per year. With the automated system in place, the company can reallocate 4 full-time employees who currently handle battery installation. These employees each earn $55,000 per year. Additionally, there is a quality control inspector earning $52,000 per year who will still be required after automation. The current cost of battery adhesives is $0.6 per unit, and the energy cost is $0.03 per unit. With the new system, both costs will be reduced by 40%. How many mobile phones should be produced and sold over the next three years to justify the investment in the automation system?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Management

Authors: John Pearce , Richard Robinson

13th Edition

0078029295, 978-0078029295

More Books