1/10/2020 Instructor: Student: Course: SCM 4330 - Applied Production Assignment: Assignment Module #3 Date: and Operations Management 1. Borges Machine Shop, Inc., has a 1-year contract for the production of 250,000 gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: General-Purpose Flexible Manufacturing Dedicated Equipment (GPE) System (FMS) Machine (DM) Annual contracted units 250,000 250,000 250,000 Annual fixed cost $100,000 $225,000 $525,000 Per unit variable cost $18.00 $14.00 $13.00 Based on the cost, the process that is best suited for the current contracted volume is (1) (1) OFMS O DM O GPE 40,000 36,000 Minimum Order 32,000 28,000 2. Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc., at $4.20 per unit with a minimum order of 3,000 units. Stan is considering instead producing the gear assembly himself. He estimates that producing it himself will cost $15,000 to set up the process and then $2.00 per unit for labor and materials. a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of purchasing from Salt Lake Supply. Total cost for the purchase option is already plotted. Properly label your line. Note: Carefully follow the instructions above and only draw the required object. b) The number of units at which either choice has the same cost is (round your response to the nearest whole number). 24,0001 20,000 16,000 12,000 8,0001 4,000- 04 2,000 4,000 Quantity 8,000 8,000