Question: Capacity Management The table below shows projected demand for a new model of leather bag being produced by BrownBag Inc. called BestBag 2.0 which will
Capacity Management The table below shows projected demand for a new model of leather bag being produced by BrownBag Inc. called BestBag 2.0 which will sell for $210. The manufacturing process is designed to produce 150 bags per week with a max capacity of 2000 bags/week. BrownBag, Inc Leather Bag, Bestbag 2.0 model Demand (in 00s) 2021 BestBag 2.0 45 2022 62 2023 70 2024 83 Assuming they produce exactly the forecasted demand, what will be BrownBag's capacity utilization for each of the four years? What will be their capacity utilization for all 4 years combined? Assuming they want to maintain an additional 20% on-hand inventory, what will be their capacity utilization for each year? For all 4 years? (Don't forget to carry over O inventory from the previous year) Break Even There are three production methods to make the BestBag 2.0 model. Outsourced to Build ABag (5178/unit) Finished assembly of prepared leather (assembly equipment cost of $105,000, S100/unit) Raw leather conditioning and bag assembly (equipment cost of $250,000, $69/unit) Approximately how much demand is needed to justify purchasing the assembly equipment? Approximately how much demand is needed to justify purchasing the conditioning and assembly equipment
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