AutoSave OFF Home Insert Share Comments to V V V Au Pages Table Text Page Number Equation Advanced Symbol Asu Document 6 Draw Design Layout References Mailings Review View Tell me SmartArt h Chart Pictures Shapes Icons 3D Add-ins Media Links Comment Header Footer Models Screenshot CHAPTER 7 - TECHNICAL CASE Borges Machine Shop, Inc., has a 1-year contract for the production of 200,000 gear housing for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increase next year. Borges has developed costs for three alternatives - these are general-purpose equipment (GPE), flexible manufacturing system (FMS) and expensive but efficient dedicated machine (DM). The costs are as follows: GPE FMS DM ANNUAL CONTRACTED UNITS TO BE PRODUCED 200,000 200,000 200,000 ANNUAL FIXED COSTS $100,000 $200,000 $500,000 PER UNIT VARIABLE COSTS $15.00 $14.00 $13.00 [NOTICE: Units remain the same but fixed costs increase with the cost of the equipment but per unit costs decrease due to the increased efficiency of the equipment] As the consultant, you need to: 1. Determine the most economical volume for each process (the crossover points): 2. Determine which process to select for the contract identified above 233 words English (United States) Page 1 of 2 Focus 110% AutoSave OFF Document 6 Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments to V V Au T- Pages Table Pictures Shapes Icons 3D Footer Text Page Number Equation Advanced Symbol SmartArt h Chart Add-ins Media Links Comment Header Models Screenshot 2. Determine which process to select for the contract identified above (200,000 units); 3. Determine the best process for each of the following volumes to be produced: 1. 75,00 2. 275,000 3. 375,000 4. If a contract for the second and third years is pending, what the implications for process selection? 5. Prepare a GRAPH showing the FIXED COSTS, TOTAL COSTS (VARIABLE COSTS X QUANTITIES), and CROSSOVER POINTS for each process and each volume. Write out your work for each, show the answer, and prepare a one-page summary that answers each of the questions. Page 2 of 2 233 words English (United States) Focus 110%