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Assignment 2

The document contains 4 problems related to operations management. Problem 1 calculates utilization and efficiency for different production scenarios. Problem 2 calculates break-even point, output and profit for given costs and revenues. Problem 3 similarly calculates break-even point and output for two machines with different costs. Problem 4 determines the optimal machine to purchase by calculating the total costs for different machines given production requirements and operating costs.

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93 views3 pages

Assignment 2

The document contains 4 problems related to operations management. Problem 1 calculates utilization and efficiency for different production scenarios. Problem 2 calculates break-even point, output and profit for given costs and revenues. Problem 3 similarly calculates break-even point and output for two machines with different costs. Problem 4 determines the optimal machine to purchase by calculating the total costs for different machines given production requirements and operating costs.

Uploaded by

mahmoud
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Mohamed Elsayed Samak

Operation management
assignment 2

Problem # 1

Need Utilization & Efficiency to the following cases:

a- Processes avarage = 7 loans / day & design capacity = 10 loans / day & effective capacity = 8 loans / day

Uitilization = actual o/p / design capacity * 100% = 7/10 * 100 = 70%

Efficiency = actual o/p / effective capacity * 100% = 7/8 * 100 = 87.5%

b- Services an avarage of 4 furnaces / day & design capacity = 6 furnaces / day & effective capacity = 5 furnaces / day

Uitilization = actual o/p / design capacity * 100% = 4/6 * 100 = 66.67%

Efficiency = actual o/p / effective capacity * 100% = 4/5 * 100 = 80%

c- Regarding the systems that have higher efficiency ratios than other systems will always have higher uitilization ratios than

those other systems , from pervious exampls we can see when the systems have higher efficiency it have higher uitilization

Problem # 2

FC = 9200 $ & VC = v = 0.7 $ / unit produced & R = 0.9 $ / unit

a- Q bep= FC / ( R - VC ) = 9200 $ / ( 0.9 $ - 0.7 $ ) = 9200 / 0.2 = 46000 unit so Q bep = 46000 unit

b- For Q = 61000 unit so P = Q (R-v) - FC = 61000 ( 0.9 - 0.7 ) - 9200 = 3000 $ or P = 3000 $ when Q = 61000 unit .
P = 8200 $ when Q = 87000 unit .
c- For P = 16000 $/month Q=? So Q = ( P + FC )/( R - v ) = ( 16000 + 9200 )/( 0.9 - 0.7 ) = 126000 $ or Q = 126000 unit when P = 16000$

d- For TR = 23000 $/month Q=? Since TR = R * Q so Q = TR/R = 23000/0.9 = 25555.56 or Q = 25556 unit when TR=23000$/month

Problem # 3

Annual FC = 40000 $ for A & Annual FC = 30000 $ for B


v = 10 $ for A & v = 11 $ for B
R = 15 $

a- Q bep for A = FC / ( R - v ) = 40000/(15-10)= 8000 unit & Q bep for B = FC / ( R - v) = 30000/(15-11)=7500 unit

b- For the same profit Q=? So since P=Q(R-v)-FC so Q(15-10)-40000=Q(15-11)-30000 or 5Q = 4Q + 10000 , finally .Q=10000 units at Pa=Pb

c- If annual demand Q = 12000 unit P=?


since P=Q(R-v) - FC so P for A = 12000(15-10)-40000=60000-40000=20000 $.
P for B = 12000(15-11)-30000=48000-30000=18000 $ .

Problem # 4

given Machine cost/machine Annual Processing time per unit (Min.)


Product
A 40000$ Demand A B C
B 30000$ 1 16000 3 4 2
C 80000$ 2 12000 4 4 3
3 6000 5 6 4
4 30000 2 2 1

a- If purchasing costs are considered, which m/c would have the lowest TC? & how many of that m/c would be needed ?
Machines operats 10h/day and 250D/year..
Annual Processing time per unit (Min.) Total Processing Time
Product
Sure Machine B should be the lowest TC & 2 of it Demand A B C A B C
will be needed considering giving data and total 1 16000 3 4 2 48000 64000 32000
processing time available/piece of machine equal 2 12000 4 4 3 48000 48000 36000
10h/day * 250 day/year = 2500 h/year 3 6000 5 6 4 30000 36000 24000
4 30000 2 2 1 60000 60000 30000
b- If A m/cs its OC=10$/h & B m/cs its OC=11$/h & Total in Min 186000 208000 122000
C m/cs its OC=8$/h which M/C would be selected ? Total in hous / year 3100 3466.67 2033.33

Since Total OC of Demand to 4 products of M/C A = 3100 * 10 = 31000$ & Total OC of Dmand to same 4 products of M/C B = 3467 * 11 =38137$
& Total OC of Demand to the same 4 products of M/C C = 2033 * 8 = 16264$ & since TC=FC+VC or TC=FC+OC in our case & consider FC
is the cost / machine so TC for A =71000$ & for B =68137$ & for C =96264$ so M/C B would be selected to mnimize Total cost .

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