Question: Creative Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the

Creative Cabinets, Inc., needs to choose a

Creative Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Annualized Fixed Cost of Plant & Equipment Labour Process Type Mass Customization Intermittent Repetitive Continuous Variable Costs (per unit) ($) Material 18 26 30 24 $1,260,000 $1,000,000 $1,625,000 $2,100,000 Energy 12 20 12 10 15 28 25 15 Creative Cabinets projects an annual demand of 40,000 units for the Maxistand. The Maxistand will sell for $120 per unit. a) Which process type will maximize the annual profit from producing the Maxistand? Based on the projected annual demand, the best alternative available is to use the process. b) What is the value of this annual profit? The value of annual profit using this method is $ (Enter your response as an integer.)

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