Question: This is a subjective question, hence you have to write your answer in the Text-Field given below. (i) Gemstone Inc. is trying to decide whether

This is a subjective question, hence you have to

This is a subjective question, hence you have to write your answer in the Text-Field given below. (i) Gemstone Inc. is trying to decide whether to invest in a new material-handling system. The current system (which is old and completely paid for) has an annual maintenance cost of $15,000 and costs approximately $25 to transport each load of material. The two new systems that are being considered vary both in sophistication and cost. System 1 has a fixed cost of $40,000 and a cost per load estimated at $15. System 2 has a fixed cost of $100,000 but a per-load cost of $ 5. At what volume of demand (i.e., number of loads) should Gemstone Inc. purchase System 1 ? System 2? [4 Marks] (ii) Discuss the types of decisions that are involved in creating a process strategy. [2 Marks]

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