Question: Creative Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the

Creative Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:

Creative Cabinets projects an annual demand of 24,000 units for the Maxistand will sell for $120 per unit.
(a) Which process type will maximize the annual profit from producing the Maxistand?
(b) What is the value of this annualprofit?

Variable Costs Annualized Fixed Cost of Process Type Mass Plant & Equip. Labor Material Energy Customization $1,260,000 30 18 nterittent Repetitive Continuous 12 20 12 10 2 $1,000,000 24 $L,625,000 28 $1,960,000 25 15

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