4. Sleekfon and Sturdyfon are two major cell phone manufacturers that have recently merged. Their current...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
4. Sleekfon and Sturdyfon are two major cell phone manufacturers that have recently merged. Their current market sizes are as shown in Table 5-9. All demand is in millions of units. Sleekfon has three production facilities in Europe (EU), North America, and South America. Sturdyfon also has three production facilities in Europe (EU), North America, and Rest of Asia/Australia. The capacity (in millions of units), annual fixed cost (in millions of $), and variable pro- duction costs ($ per unit) for each plant are as shown in Table 5-10. Transportation costs between regions are as shown in Table 5-11. All transportation costs are shown in $ per unit. Duties are applied on each unit based on the fixed cost per unit capacity, variable cost per unit, and transportation cost. Thus, a unit currently shipped from North America to Africa has a fixed cost per unit of capacity of $5.00, a vari- able production cost of $5.50, and a transportation cost of $2.20. The 25 percent import duty is thus applied on $12.70 (5.00 + 5.50 + 2.20) to give a total cost on import of $15.88. For the questions below, assume that market demand is as in Table 5-9. The merged company has estimated that scaling back a 20-million-unit plant to 10 million units saves 30 percent in fixed costs. Variable costs at a scaled-back plant are unaffected. Shutting a plant down (either 10 million or 20 million units) saves 80 percent in fixed costs. Fixed costs are only partially recovered because of severance and other costs associated with a shutdown. What is the lowest cost achievable for the production and distribution network prior to the merger? Which plants serve which markets? b. What is the lowest cost achievable for the production and distribution network after the merger if none of the plants is shut down? Which plants serve which markets? c. What is the lowest cost achievable for the production and distribution network after the merger if plants can be scaled back or shut down in batches of 10 million units of capacity? Which plants serve which markets? d. How is the optimal network configuration affected if all duties are reduced to 0? e. How should the merged network be configured? Table 5-9 Global Demand and Duties for Sleekfon and Sturdyfon Europe Europe (EU) Rest of Asia/ Market N. America S. America (Non EU) Japan Australia Africa Sleekfon demand 10 4 20 3 2 2 1 Sturdyfon demand 12 1 4 8 7 3 1 Import duties (%) 3 20 4 15 4 22 25 Table 5-10 Plant Capacities and Costs for Sleekfon and Sturdyfon Capacity Fixed Cost/Year Variable Cost/Unit Sleekfon Europe (EU) 20 100 6.0 N. America 20 100 5.5 S. America 10 60 5.3 Sturdyfon Europe (EU) N. America 20 100 6.0 20 100 5.5 Rest of Asia 10 50 5.0 Table 5-11 Transportation Costs Between Regions ($ per Unit) Europe (EU) Europe (Non EU) Rest of Asia/ N. America S. America Japan Australia Africa N. America 1.00 1.50 1.50 1.80 1.70 2.00 2.20 S. America 1.50 1.00 1.70 2.00 1.90 2.20 2.20 Europe (EU) 1.50 1.70 1.00 1.20 1.80 1.70 1.40 Europe (Non EU) 1.80 2.00 1.20 1.00 1.80 1.60 1.50 Japan 1.70 1.90 1.80 1.80 1.00 1.20 1.90 Rest of Asia/Australia 2.00 2.20 1.70 1.60 1.20 1.00 1.80 Africa 2.20 2.20 1.40 1.50 1.90 1.80 1.00 4. Sleekfon and Sturdyfon are two major cell phone manufacturers that have recently merged. Their current market sizes are as shown in Table 5-9. All demand is in millions of units. Sleekfon has three production facilities in Europe (EU), North America, and South America. Sturdyfon also has three production facilities in Europe (EU), North America, and Rest of Asia/Australia. The capacity (in millions of units), annual fixed cost (in millions of $), and variable pro- duction costs ($ per unit) for each plant are as shown in Table 5-10. Transportation costs between regions are as shown in Table 5-11. All transportation costs are shown in $ per unit. Duties are applied on each unit based on the fixed cost per unit capacity, variable cost per unit, and transportation cost. Thus, a unit currently shipped from North America to Africa has a fixed cost per unit of capacity of $5.00, a vari- able production cost of $5.50, and a transportation cost of $2.20. The 25 percent import duty is thus applied on $12.70 (5.00 + 5.50 + 2.20) to give a total cost on import of $15.88. For the questions below, assume that market demand is as in Table 5-9. The merged company has estimated that scaling back a 20-million-unit plant to 10 million units saves 30 percent in fixed costs. Variable costs at a scaled-back plant are unaffected. Shutting a plant down (either 10 million or 20 million units) saves 80 percent in fixed costs. Fixed costs are only partially recovered because of severance and other costs associated with a shutdown. What is the lowest cost achievable for the production and distribution network prior to the merger? Which plants serve which markets? b. What is the lowest cost achievable for the production and distribution network after the merger if none of the plants is shut down? Which plants serve which markets? c. What is the lowest cost achievable for the production and distribution network after the merger if plants can be scaled back or shut down in batches of 10 million units of capacity? Which plants serve which markets? d. How is the optimal network configuration affected if all duties are reduced to 0? e. How should the merged network be configured? Table 5-9 Global Demand and Duties for Sleekfon and Sturdyfon Europe Europe (EU) Rest of Asia/ Market N. America S. America (Non EU) Japan Australia Africa Sleekfon demand 10 4 20 3 2 2 1 Sturdyfon demand 12 1 4 8 7 3 1 Import duties (%) 3 20 4 15 4 22 25 Table 5-10 Plant Capacities and Costs for Sleekfon and Sturdyfon Capacity Fixed Cost/Year Variable Cost/Unit Sleekfon Europe (EU) 20 100 6.0 N. America 20 100 5.5 S. America 10 60 5.3 Sturdyfon Europe (EU) N. America 20 100 6.0 20 100 5.5 Rest of Asia 10 50 5.0 Table 5-11 Transportation Costs Between Regions ($ per Unit) Europe (EU) Europe (Non EU) Rest of Asia/ N. America S. America Japan Australia Africa N. America 1.00 1.50 1.50 1.80 1.70 2.00 2.20 S. America 1.50 1.00 1.70 2.00 1.90 2.20 2.20 Europe (EU) 1.50 1.70 1.00 1.20 1.80 1.70 1.40 Europe (Non EU) 1.80 2.00 1.20 1.00 1.80 1.60 1.50 Japan 1.70 1.90 1.80 1.80 1.00 1.20 1.90 Rest of Asia/Australia 2.00 2.20 1.70 1.60 1.20 1.00 1.80 Africa 2.20 2.20 1.40 1.50 1.90 1.80 1.00
Expert Answer:
Answer rating: 100% (QA)
lwest st hievble fr rdutin nd distributin fr the first mny is 56438600 ... View the full answer
Related Book For
Applied Regression Analysis and Other Multivariable Methods
ISBN: 978-1285051086
5th edition
Authors: David G. Kleinbaum, Lawrence L. Kupper, Azhar Nizam, Eli S. Rosenberg
Posted Date:
Students also viewed these mathematics questions
-
The data shown in the following table are highway gasoline mileage performance and engine displacement for a sample of 20 cars. (a) Fit a simple linear model relating highway miles per gallon (y) to...
-
The financial information shown in the following table was presented for Massive Enterprises Ltd. for the year ending May 31, 20X1. Statement of Income Sales $1,700,000 Cost of sales 830,000 Gross...
-
Three large tanks contain brine, as shown in the following figure. Use the information in the figure to construct a mathematical model for the number of pounds of salt x 1 (t), x 2 (t), and x 3...
-
An electron experiences the greatest force as it travels 2.9 X 106 m/s in a magnetic field when it is moving north-ward. The force is upward and of magnitude 7.2 X 10-13N. What are the magnitude and...
-
A two-transistor series voltage feedback amplifier is shown in Figure P2.24(a). This AC equivalent circuit neglects the bias resistors and the shunt capacitors. A block diagram representing the...
-
Consider the shifted exponential distribution. When θ = 0, this density reduces to the usual exponential distribution. When θ > 0, there is only positive probability to the right of...
-
The common methods for the computational solution of radiative transport equations are summarized briefly below: 1. The discrete ordinate method 2. The Monte-Carlo method 3. Hottel's zonal method 4....
-
The following information was drawn from the annual report of Sierra Home Builders (SHB). Required a. Compute the percentage of growth in net income from 2016 to 2017. Can stockholders expect a...
-
Provide in detail the process for contesting OSHA citations.
-
"Part 1: The Performance Lawn Equipment database contains data needed to develop a pro forma income statement. Dealers selling PLE products all receive 18% of sales revenue for their part of doing...
-
Post a short case analysis of a chapter-end case summary. Using IRAC to the extent possible: identify the Issue, decide what Rule (law) you need to decide that Issue, apply the Rule to your facts...
-
Unintended Consequences Worksheet D B A C E Who influences the entries in column B? Who influences the process? The process Who is influenced by the process? Who is influenced by the entries in...
-
Give an example of a matrix that does not have an eigenvalue decomposition. Give an example of a matrix that has an eigenvalue decomposition, but that does not have an orthogonal eigenvalue...
-
Armand said that to represent subtracting - 11 from 2 by using colored counters, you could add eleven black counters to two black counters. (a) Is Armand correct? How would you respond to Armand? (b)...
-
What are the six operational activity forecasts necessary for determining future facility requirements?
-
Value Cakes's vision is "To be the first option of our customers when they think of cake". Recently, a Communication's Analyst hired by Value Cakes came across a few instagram posts and online...
-
The issue of fraud must be considered when managing risk as it could present a major liability to the organization. Fraud is an act that requires an aggressive response and correction by an...
-
For the data in Exercise 17-19, use the FIFO method to summarize total costs to account for, and assign these costs to units completed and transferred out, and to units in ending work in process....
-
A company evaluated three new production-line technologies, one involving high automation, the second involving moderate automation, and the third involving low automation. All three technologies...
-
Consider the following computer results, which describe regression analyses involving two independent variables X1 and X2 and a dependent variable Y. Assume that your goal is to assess the...
-
An experiment was conducted to determine the extent to which the growth rate of a certain fungus could be affected by filling test tubes containing the same medium at the same temperature with...
-
A gene is a segment of DNA that contains the information to produce a functional product. The functional product of most genes is a. DNA. b. mRNA. c. a polypeptide. d. none of the above.
-
Which of the following is not a constituent of a cells proteome? a. An enzyme b. A cytoskeletal protein c. A transport protein in the plasma membrane d. An mRNA
-
The function of the genetic code is to a. promote transcription. b. specify the amino acids within a polypeptide. c. alter the sequence of DNA. d. do none of the above.
Study smarter with the SolutionInn App