A Company Is Investigating Two Automated Approaches for Its Production

question 61

Multiple Choice

A company is investigating two automated approaches for its production process. It has collected the following cost information about each:
$\begin{array}{|l|c|c|}\hline \text { Alternative } & \text { Fixed Cost } & \text { Variable Cost } \\\hline \text { CNC } & \$ 80,000 & \$ 2.75 \\\hline \text { FMS } & \$ 190,000 & \$ 1.25 \\\hline\end{array}$
-If the forecast annual production volume is 50,000 units, which technology alternative should the company choose?

• A) CNC
• B) FMS

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Definitions:

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A visual representation designed to illustrate the relationships between different elements of a system or process.

Premises

Statements or propositions from which a conclusion is drawn in an argument; the grounding or basis of the argument.

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Phenomena or facts that are explained within the context of scientific or philosophical inquiry.

Hypothesis

The proposition (or propositions) in an explanation that purport to show why another proposition (the explanandum) is true.