77945 () Gemstone Inc. to decide whether to invest in a new material-handling system. The current...

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77945 () Gemstone Inc. to decide whether to invest in a new material-handling system. The current system (which is old and completely paid for) has an annual maintenance cost of $15,000 and costs approximately $25 to transport each load of material. The two new systems that are being considered vary both in sophistication and cost. System 1 has a fixed cost of $40,000 and a cost per load estimated at $15. System 2 has a fixed cost of $100,000 but a per-load cost of $5. At what volume of demand (i.e., number of loads) should Gemstone Inc. purchase System 1? System 2? [4 Marks] (ii) Discuss the types of decisions that are involved in creating a process strategy. [2 Marks] 77945 () Gemstone Inc. to decide whether to invest in a new material-handling system. The current system (which is old and completely paid for) has an annual maintenance cost of $15,000 and costs approximately $25 to transport each load of material. The two new systems that are being considered vary both in sophistication and cost. System 1 has a fixed cost of $40,000 and a cost per load estimated at $15. System 2 has a fixed cost of $100,000 but a per-load cost of $5. At what volume of demand (i.e., number of loads) should Gemstone Inc. purchase System 1? System 2? [4 Marks] (ii) Discuss the types of decisions that are involved in creating a process strategy. [2 Marks]

Answer rating: 100% (QA)

Given that For current system Annual maintenance cost 10000 25 ... View the full answer