Everything else being equal, a firm considering outsourcing would find all of the following desirable except:

A. proprietary information will be disclosed to the supplier.

B. control over operations will be maintained by the firm.

C. total costs will be lower for outsources goods or services.

D. it can maintain tight control over knowledge.

E. its supplier has more expertise in whatever is being outsourced.

True or False: Economies of scale means that large factories operating a planned capacity are able to make many different products at the same time and promise short delivery times.

Foundries owe much of their success to:

A. Flexibility

B. Location

C. Diseconomies of scale

D. Volume purchases of materials and supplies

Benefits received from economies of scale include: (Choose all that apply)

-Price discounts due to volume purchases of materials and supplies

-Lower cost per unit produced

-Decreasing cost per unit as the output level is reduced

-The more you do something, the better you get at it

A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $7,100 per month and variable cost of 61 cents per unit produced. Each item is sold to retailers at a price that averages 86 cents. (Round all answers to a whole number.)

a. What volume per month is required in order to break even?

b. What profit would be realized on a monthly volume of 76,000 units? 91,000 units?

c. What volume is needed to obtain a profit of $17,000 per month?

d. What volume is needed to provide a revenue of $24,000 per month?

true or false: Breakeven analysis is a way to compare the total costs of multiple options.

A breakeven analysis of multiple options requires which things (choose all that apply)?

-Forecast of customer demand

-Industry benchmarking analysis

-Fixed cost for each option

-Variable cost for each option

The point at which the costs of two options are equal, or that a system changes from losing to making money is called:

A. Celebration point

B. Braking point

C. Break-loose point

D. Breakeven point

A Virginia county is considering whether to pay $50,000 per year to lease a prisoner transfer facility in a prime location near Washington, D.C. They estimate it will cost $50 per prisoner to process the paperwork at this new location. The county is paid a $75 commission for each new prisoner they process. How many prisoners would they have to process annually to make a profit of $100,000 at this new location?

A. 6,000

B. 5,000

C. 8,000

D. 4,000

E. 2,000

The owner of Sky High Tours is considering purchasing a bus, which sells for $75,000, to expand their tour operations. The owner estimates that it will cost an additional $150 per tour to operate the bus, while the owner can book the bus for tours for $300. If, for this bus, design capacity is 60 passengers per tour, effective capacity is 50 passengers per tour, and actual output is anticipated to be 45 passengers per tour, what would be its utilization? A. 80 percent B. 70 percent C. 100 percent D. 75 percent D.90 percent

The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000. He figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. If, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?

A. 80 percent

B. 100 percent

C. 70 percent

D. 0 percent

E. 75 percent