An Organization Is Considering Three Process Configuration Options

question 91

Essay

An organization is considering three process configuration options. There are two different intermittent processes, as well as a repetitive focus. The smaller intermittent process has fixed costs of $3,000 per month and variable costs of $10 per unit. The larger intermittent process has fixed costs of $12,000 per month and variable costs of $2 per unit. A repetitive focus plant has fixed costs of $50,000 per month and variable costs of $1 per unit.
(a) If the company produced 20,000 units, what would be its cost under each of the three choices?
(b) Which process offers the lowest cost to produce 40,000 units? What is that cost?

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Definitions:

Nonverbal Signal

A form of communication without words, such as gestures, facial expressions, body language, and other visual cues, that conveys a message.

Nonverbal Signals

Nonverbal signals include body language, gestures, facial expressions, and other forms of physical communication that convey feelings and intentions without words.

Spoken Word

Involves the expression or articulation of thoughts, ideas, or emotions through verbally communicated words as opposed to written language.

Communication Validity

The degree to which messages or information are accurate and reliable in the context of communication.