Carlson Manufacturing Is a Producer of Plastic Bottles for Bottled

question 69

Essay

Carlson Manufacturing is a producer of plastic bottles for bottled water companies.In July of this year,the plant manager switched to a new supplier of raw materials.The materials have a lower cost,and because of their chemical composition,more bottles can be made per hour.The downside of this faster production is that more bad,unusable bottles result.Below are the production data for the two months before and after the switch of suppliers.

a. Compute bad units as a percentage of total production for each month. Round answers to two decimal places.
b. What does the plant manager need to consider in determining whether or not to continue buying raw material from the new supplier?

Understand the different types of innovations and their characteristics.

Identify the stages of the innovation process and their significance.

Recognize examples of product, process, business model, and social business innovations.

Comprehend how competitive advantage can be achieved through innovation.

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Definitions:

Historical Average

A statistical measure that represents the average outcome of a set of data over a previous period.

Rate of Return

The increase or decrease in the value of an investment during a specific timeframe, represented as a proportion of the investment's initial outlay.

Commodity

A basic good used in commerce that is interchangeable with other commodities of the same type; common examples include grains, gold, beef, oil, and natural gas.

Derivative Markets

Financial markets for instruments like futures, options, and swaps, whose value is derived from an underlying asset such as commodities, stocks, or currencies.