MRAD

BA $420$ Supply Chain Management

Duration

$2h$

Question $1(15$ pts$)$

A Tunisian dairy company produces fresh milk. The production manager can estimate demand, fixed cost, revenues, and variable cost per liter. He thinks a largelly manual process will have a monthly fixed cost of $50000$ TND and a variable cost of $1\mathrm{.}25$ TND per liter. On the other hand, a more mechanized process will have a fixed cost of $75000$ TND per Month with a variable cost of $1\mathrm{.}15$ TND per liter. In addition, he expects to sell the milk for $2\mathrm{.}3$ TND per liter.

What is the break$-$even quantity for the manual process? $(2\mathrm{.}5pts)$

What is the revenue at the break$-$even quantity for the mechanized process? $(2\mathrm{.}5pts)$

What is the break$-$even quantity for the mechanized process? $(2\mathrm{.}5pts)$

What is the monthly profit or loss of the manual process if the company expects to sell $60000$ liters per month? $(2\mathrm{.}5pts$

What is the monthly profit or loss of the mechanized process if the company expects to sell $60000$ liters per month? $(2\mathrm{.}5pts$

At what quantity should the company be indifferent to the selected process? $(2\mathrm{.}5pts)$