Part 1 of Points: 0.16 of 3 Sherman Industries manufactures plastic bottles for the food industry. (Click the icon to view additional information.) Management has arrived at three possible courses of action for the machine drool issue: (Click the icon to view the courses of action.) Read the requirements Requirement 1. What is the annual cost of the machine drool currently include both the original plastics cost and the waste disposal cost. Annual cost Material cost of machine drool (plastic) Disposal cost Total annual cost Sherman Industries manufactures plastic bottles for the food industry. (Click the icon to view additional information. Management has arrived at three possible courses of action for the machine drool issue: (Click the icon to view the courses of action.) More info More info Requirem Material cl Disposal On average, Sherman pays $73 per ton for its plastics. Sherman's waste disposal company has increased its waste disposal charge to $51 per ton for solid and inert waste. Sherman generates a total of 500 tons of waste per month. The company's managers have been evaluating the production processes for areas to cut waste. In the process of making plastic bottles, a certain amount of machine "drool" occurs. Machine drool is the excess plastic that "drips off the machine between molds. In the past, Sherman has discarded the machine drool. In an average month, 190 tons of machine drool are generated. 1. Do nothing and pay the increased waste disposal charge 2. Sell the machine drool waste to a local recycler for $12 per ton. 3. Reengineer the production process at an annual cost of $65,000. This change in the production process would reduce the amount of machine drool generated by 60% each month. The remaining machine drool would then be sold to a local recycler for S12 per ton. Total annu Print Done Print Done Fon: 0:1 Sherman Industries manufactures plastic bottles for the food industry. (Click the icon to view additional information.) Management has arrived at three possible courses of action for the machine drool issue: (Click the icon to view the courses of action.) Read the requirements Requirement What is the annual cost of the machine drool currently? Include both the original plastics cost and the waste disposal cost. Annual cost Material cost of machine drool (plastic) Disposal cost Requirements Total annual cost 1. What is the annual cost of the machine drool currently? Include both the original plastics cost and the waste disposal cost. 2. How much would the company save per year (net) if the machine drool were to be sold to the local recycler? 3. How much would the company save per year (net) if the production process were to be reengineered? 4. What do you think the company should do? Explain your rationale. Print Done
