Question
Corporation manufactures snowboards. The CEO, is trying to decide whether to adopt a lean production model. He expects that adopting lean production would save $107,000
Corporation manufactures snowboards. The CEO, is trying to decide whether to adopt a lean production model. He expects that adopting lean production would save $107,000 in warehousing expenses and $45,500 in spoilage costs. However, adopting lean production will require several one-time up-front expenditures: (1) $ 14,500 for an employee training program, (2) $ 41,500 to streamline the plant's production process, and (3) $ 7,000 to identify suppliers that will guarantee zero defects and on-time delivery.
questions
1.What are the total costs of adopting lean production?
2. What are the total benefits of adopting lean production?
3.Should Corporation adopt lean production? Why or why not?
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