Question: There are 05 old machines being used for making subassemblies for product X and variation in output of each machine output is 1 to 6.

There are 05 old machines being used for making subassemblies for product X and variation in output of each machine output is 1 to 6.

The profit from product X is Rs200/ unit and inventory carrying cost is Rs 50 / sub assembly

There are following 4 strategies

1. Double the capacity by spending Rs200000/ machine.

2.Replace old machine with Rs30000/ machine.

3. Spend Rs 100000/ machine to improve capacity variation 2 to 5.

4. Spend Rs150000/ machine to improve capacity variation 3-4.

We have to maximise ROI by selection of strategies.

what will be the best strategy.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Q:

There are 05 old machines being used for making subassemblies for product X and variation in output of each machine output is 1 to 6. The profit from product X is Rs200/ unit and inventory carrying...

Q:

There are 05 old machines being used for making subassemblies for product X and variation in output of each machine output is 1 to 6. The profit from product X is Rs200/ unit and inventory carrying...

Q:

On the profitability side, you should specifically address the following points: a) Is the cost structure of the two companies similar or different? Does the cost structure reflect their respective...

Q:

Continuing Case Problem: Titan Pipe, Inc. Part C Titan Pipe uses very stringent standard costs in evaluating its manufacturing efficiency. However, Scott Balmer, the cost accountant and budget...

Q:

Old MathJax webview need project report on all question is full Colgate Product Note: Since the Normal Time Labour cost has already been considered in the computation of Sants per the 3. Hect of...

Q:

Due Sunday, 11/20: Problems from Zimmerman text: 2-11, 2-44, Case 2-3, 7-7, and 7-20 Chapter Two The Nature of Costs Chapter Outline A. Opportunity Costs 1. Characteristics of Opportunity Costs 2....

Q:

Unit 2: Designing the Operations Designing the operations of an organization or your department - precedes operational management. For .ll _ . example, suppose a wallet manufacture's mission is to '...

Q:

To be solved by DKetan. Using Chapter 7 of your text as a reference, define a standard cost and explain what constitutes the components of a standard cost. Describe the advantages and disadvantages...

Q:

1. (6-B3) Dropping a Product Line Hamleys Toy Store is on Regent Street in London. It has a magic department near the main door. Suppose that management is considering dropping the magic department,...

Q:

Management accounting assignment: Write a critique with reference list. Please help me write something as much as you could. Analysing technology investmentsfrom NPV to Strategic Cost Management...

Q:

Under the indirect method, depreciation expense is added to net income to report cash flows from operating activities. Does depreciation cause an inflow of cash?

Q:

On a 5*5 matrix in Gray Coding application explain the details.

Q:

An audited company has not paid its 2 0 1 8 audit fees. According to the AICPA Code of Professional Conduct, for the auditor to be considered independent with respect to the 2 0 1 9 audit, the 2 0 1...

Q:

Create a C# application named SalesTransactionDemo that declares several SalesTransaction objects and displays their values and their sum. The SalesTransaction class contains the following fields:...