Scribd Logo
Upload

Welcome to Scribd!

  • MODULE 1 Student Slide

    Uploaded by

    Kamarul Nizam
    24 views1 page
    James Taggert, owner of Taggert Custom Machine Shop, is choosing a manufacturing process for a new contract to produce 130,000 units. Three options are general purpose equipment, flexible manufacturing systems, and dedicated automation. General purpose equipment has the lowest fixed cost but highest variable cost, while dedicated automation has the highest fixed cost and lowest variable cost. The optimal choice is determined by comparing total costs using either algebraic calculations or a graphical analysis, and considering volume requirements over multiple contract years favors options with higher fixed costs.

    Original Description:

    practice

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    James Taggert, owner of Taggert Custom Machine Shop, is choosing a manufacturing process for a new contract to produce 130,000 units. Three options are general purpose equipment, flexible manufacturing systems, and dedicated automation. General purpose equipment has the lowest fixed cost but highest variable cost, while dedicated automation has the highest fixed cost and lowest variable cost. The optimal choice is determined by comparing total costs using either algebraic calculations or a graphical analysis, and considering volume requirements over multiple contract years favors options with higher fixed costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    24 views1 page

    MODULE 1 Student Slide

    Uploaded by

    Kamarul Nizam
    James Taggert, owner of Taggert Custom Machine Shop, is choosing a manufacturing process for a new contract to produce 130,000 units. Three options are general purpose equipment, flexible manufacturing systems, and dedicated automation. General purpose equipment has the lowest fixed cost but highest variable cost, while dedicated automation has the highest fixed cost and lowest variable cost. The optimal choice is determined by comparing total costs using either algebraic calculations or a graphical analysis, and considering volume requirements over multiple contract years favors options with higher fixed costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    Module 2 Process Strategy

    Practice Problems:
    Problem 1:
    Taggert Custom Machine Shop has a contract for 130,000 units of a new product. James Taggert, the owner, has calculated
    the cost for three process alternatives. Which process should he choose for this new contract?

    General Purpose Flexible Manufacturing Dedicated Automation


    Equipment (GPE) (FMS) (DA)

    Fixed Costs $150,000 $350,000 $950,000

    Variable Costs $10 $8 $6

    Problem 2:
    Solve Problem 1 graphically

    Problem 3:
    Using either your analytical solution found in Problem 1 or the graphical solution found in Problem 2, identify the volume ranges
    where each process should be used.

    Problem 4:
    If Taggert Custom Machine is able to convince the customer to renew the contract for another one or two years, what
    implications does this have for his decision?

    You might also like