Chapter 7

Harley-Davidson, because it has so many possible combinations of products, utilizes the process strategy of mass customization

False

The Federal Reserve did something last week that they have not done since 2018.

Raise interest rates

Kristin is thinking about opening a Chinese restaurant and needs to buy a rice cooker. Machine A has fixed cost of $100 and variable cost of $1/pound. Machine B has fixed cost of $500 and variable cost of $0.10/pound. If Kristin plans to sell 1000 pounds of rice, which machine should she choose?

(A) 100 + 1(1000) = 1100 (B) 100 + 0.10(1000) = 600 Choose machine B because it's cheaper

Christopher's Cranks uses a machine that can produce 100 cranks per hour. The firm operates 12 hours per day, five days per week. Due to regularly scheduled preventive maintenance, the firm expects the machine to be running during approximately 95% of the available time. Based on experience with other products, the firm expects to achieve an efficiency level for the cranks of 75%. What is the expected weekly output of cranks for this company? A) 5100 B) 5700 C) 4845 D) 8421 E) 4275

4275

Big John's Manufacturing currently produces its lead product on a machine that has a variable cost of $3.50 per unit, and fixed costs of $62,000. Big John is considering purchasing a new machine that would drop the variable cost to $1.90 per unit but has fixed costs of $150,000. What is the cross-over point between the two machines?

55,000 62,000 + (3.5)V1 = 150,000 + (1.9)V1 1.6 V1 = 88,000 V1. = 55,000

Effective capacity x Efficiency

= Expected output

Net present value

discounted value for a series of future cash receipts

Three of the four types of processes are

process focus, repetitive focus, product focus

Frito-Lay is to ________ focus as Harley Davidson is to ________ focus.

product, mass customization

Consider a production line with five stations. Station 1 can produce a unit in 9 minutes. Station 2 can produce a unit in 10 minutes. Station 3 has two identical machines, each of which can process a unit in 12 minutes (each unit only needs to be processed on one of the two machines. Station 4 can produce a unit in 11 minutes. Station 5 can produce a unit in 8 minutes. Which station is the bottleneck station?

station 4