Problems $7\mathrm{.}1-7\mathrm{.}12$ relate to Four Process Strategies

$7\mathrm{.}1$ Borges Machine Shop, Inc., has a $1-$year contract

for the production of $200,000$ gear housings for a new off$-$road

vehicle. Owner Luis Borges hopes the contract will be extended

and the volume increased next year. Borges has developed costs

for three alternatives. They are general$-$purpose equipment

$($GPE$),$ flexible manufacturing system $($FMS$),$ and expensive, but

efficient, dedicated machine $($DM$).$ The cost data follow:

Which process is best for this contract?

$7\mathrm{.}2$ Using the data in Problem $7\mathrm{.}1,$ determine the most

economical volume for each process.

$7\mathrm{.}3$ Using the data in Problem $7\mathrm{.}1,$ determine the best pro$-$

cess for each of the following volumes: $(1)75,000,(2)275,000,$

and $(3)375,000.$