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The Manager of a Manufacturing Company, following a market analysis, plans to start producing again a gadget which his/her Company used to produce 10
The Manager of a Manufacturing Company, following a market analysis, plans to start producing again a "gadget" which his/her Company used to produce 10 years ago. You oversee Production and the Manager asks you: 1) define the number of gadgets that must be produced and sold to "breakeven" 2) define how many m/h will be required to produce the "breakeven gadget" The Manager gives you the following data: Setting up the production line will require a fixed cost of $150,000 A market analysis indicates that the Company will be able to sell the "gadgets" for $900 each 10 years ago, cost of production (inclusive of material, labor, utilities, etc.) was $400 per gadget The Composite Cost index 10 years ago was 150 The Composite Cost index today is 300 The anticipated Learning Curve Rate for the new production is 95% The anticipated time for the new production of the first "gadget is 15 m/h
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