CHAPTER 7 - TECHNICAL: CASE #7 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 2. Determine the best process for each of the following volumes: 1. 75,00 2. 275,000 3.375,000 3. If a contract for the second and third years is pending, what the implications for process selection? Write out your work for each, show the answer, and prepare a one page summary that answers each of the questions. FOR THREE EXTRA CREDIT POINTS: Prepare a SERVICE BLUEPRINT (Figure 7.7 on p.292) for the process of REGISTERING FOR CLASS at La Roche University. Your GOAL is to COMPLETE YOUR REGISTRATION FOR YOUR FALL SEMESTER CLASSES - Identify issues and problems and write up possible solutions. Your SERVICE BLUEPRINT should be one page and your ANALYSIS of problems and solutions should be a second page. Attach to the assignment above and upload to CANVAS