Marketing is requesting a 1,000,000 pcs/year volume and the life expectancy for this part is 5 years. Estimated part weight is 1.750 kg.

1. What will be the weekly required production rate to meet the yearly volume?
2. How many cavities are recommended for the production yearly volume required?
3. Based on your previous answer, how many normal hours and overtime hours will be required to meet the weekly production schedule.
4. Determine the piece price the first year considering the initial investment amortized on the first year of production and a 25 % gross profit.

Useful data:

Mr. O reported :$100,000 USD development cost.

Mr. CASIO reported: MOLD: $350,000 USD for 1 Cav.

& $550,000 for 2 cav. mold

Checking fixture: $60,000 USD

Secondary Equipment :$25,000 USD

Mr. NICASIO reported:

Cycle time : 50 seconds

Machine utilization cost : 3000 USD/hour

Material Cost: $4.50 USD/LB.

Labor Cost Normal time: 20 USD/hour

Labor Cost overtime : 40 USD/hour

SG&A cost : 20 USD/hour

WORK HOURS: NORMAL TIME: 3 SHIFTS OF 8 HOURS

WEEKENDS ARE OVERTIME

52 WEEKS PER YEAR.