Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In this assignment, you will answer four questions based on a supply chain scenario. Scenario: Carrier sells air conditioning units to distributors. Ahead of the

In this assignment, you will answer four questions based on a supply chain scenario.

Scenario: Carrier sells air conditioning units to distributors. Ahead of the upcoming summer, demand probability is 40,000 units (25%), 55,000 units (35%), 70,000 units (25%), and 80,000 units (15%).

  • Fixed cost of production = $500,000
  • Variable cost of production per unit = $1,200
  • Per unit selling price= $1500
  • Salvage value for unsold products = $900

Answer the following questions:

  1. If the manufacturer is considering production quantities of 40,000 units or 80,000 units, assuming 90% of product will be sold and 10% will be salvaged, what is the profit per unit? Which option would you select and why?

  1. The manufacturer is considering production quantities of 40,000 units or 80,000 units. For the 40,000 unit plan, assume 95% of product will be sold and 5% will be salvaged; for the 80,000 unit plan, assume 80% of product will be sold and 20% will be salvaged. What is the profit per unit? Which option would you select and why?

  1. With an expected demand of 55,000 units for the summer (MayJuly), a maximum demand of 80,000 units for the summer, and a 2-week lead time, calculate the amount of safety stock needed to cover demand.

  1. If the manufacturer chooses to produce 70,000 units but there is demand for 80,000 units, how much total profit and per-unit profit would be lost?

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

Step: 3

blur-text-image

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

Management Fundamentals

Authors: Robert N. Lussier

9th Edition

154438419X, 978-1544384191

More Books

Students also viewed these General Management questions

Question

2. I get anxious.

Answered: 1 week ago

Question

4. Are there any disadvantages?

Answered: 1 week ago

Question

3. What are the main benefits of using more information technology?

Answered: 1 week ago

Question

start to review and develop your employability skills

Answered: 1 week ago