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please help me build conceptual model for question 3 Problem Solving Question III (20 Points) David's company is considering its capacity plan to set up
please help me build conceptual model for question 3
Problem Solving Question III (20 Points) David's company is considering its capacity plan to set up the facility in its workshop to produce a new product, electronic clock. He is wondering how many machines to be purchased. To purchase a machine, the cost is $15,000 per year. The capacity of a machine is 40 units of electronic clocks per day (that is the maximal clocks a machine can produce is 40 units). The variable cost of producing an electronic clock is $15. The overhead cost is $80,000 per year. Assume the workshop runs 250 days a year. An electronic clock can be sold at $20 per unit. a. Please briefly present your conceptual model to this problem. b. Develop an Excel model to show that if David purchases 4 machines, what daily demand of electronic clocks for the workshop will allow David to break even? c. If David forecasts the daily demand is 220 units, discuss how the number of machines affect David's profit and graphically shows this impact. How many machines David should purchase? Note: For the conceptual model in question a, see the note in Question II. Problem Solving Question III (20 Points) David's company is considering its capacity plan to set up the facility in its workshop to produce a new product, electronic clock. He is wondering how many machines to be purchased. To purchase a machine, the cost is $15,000 per year. The capacity of a machine is 40 units of electronic clocks per day (that is the maximal clocks a machine can produce is 40 units). The variable cost of producing an electronic clock is $15. The overhead cost is $80,000 per year. Assume the workshop runs 250 days a year. An electronic clock can be sold at $20 per unit. a. Please briefly present your conceptual model to this problem. b. Develop an Excel model to show that if David purchases 4 machines, what daily demand of electronic clocks for the workshop will allow David to break even? c. If David forecasts the daily demand is 220 units, discuss how the number of machines affect David's profit and graphically shows this impact. How many machines David should purchase? Note: For the conceptual model in question a, see the note in Step by Step Solution
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