BREAK$-$EVEN

Ricky has opened a new store renting golf carts. Fixed costs are $$250,000,$ and the variable cost per unit is $$50\mathrm{.}00.$ The average sale is $$75$ per customer. Determine the break$-$even quantity both graphically and algebraically.

MAKE OR BUY

You currently make a part for old equipment at a cost of $$20/$ unit. The annual fixed cost for this equipment is $$75,000.$ You have found an outside supplier who will make the part for $$18/$ unit if you will pay their annual fixed costs of $$150,000/$ year.

What is the break$-$even quantity between buying and making?

If you are expecting an annual demand of $65,000$ units will it be better to make or buy?

PREFERENCE MATRIX

A company is screening ideas for new services. Two alternative service ideas are being considered. Management identified five criteria and weighted them as follows: A $=30,$ B $=10,$

C $=20,$ D $=25,$ and E$=15.$ They have also come up with scored values for the two alternatives and the five criteria as shown below. Management has decided that if an alternative has less than a total scored value of $600,$ it should automatically be rejected. Use the preference matrix technique to determine which idea should be accepted.

Alternative A

Alternative B

Criteria

Weight

Score

WS

Score

WS

A

$30$

$8$

$6$

B

$10$

$5$

$9$

C

$20$

$7$

$10$

D

$25$

$9$

$7$

E

$15$

$3$

$4$