Shamrock is still debating whether it should introduce Y28. The following table

Question

Shamrock is still debating whether it should introduce Y28. The following table provides info on selling prices, variable costs, and inventory carrying costs for Z39 and Y28.
More Info 1 sShamrock estimates that it will receive 100 orders for Z39 during the coming year Each order of Z39 will take 80 hours of machine time. The annual machine capacity is 9,000 hours. Shamrock is considering introducing a new product, Y28. The company expects it will receive 25 orders of Y28 in the coming year. Each order of Y28 will take 20 hours of machine time. Assuming the demand for Z39 wil not be affected by the introduction of Y28, the average waiting time for an order received is 650 hours. The average manufacturing cycle time per order for Z39 if Shamrock introduces Y28 is 730 hours, and the average manufacturing cycle time per order for Y28 is 670 hours. The average amount of time that an order for Z39 will wait in line before it is processed is 320 hours. The average manufacturing cycle time per order for Z39 without introducing Y28 is 400. Print Done

Explanation / Answer

Without introducing Y28 in the line the following will be the cost and profit for the substance

After introduction of Y28 , following will be the change in the profit of the organisation

1363050

Introducing Y28 will have a total profit of 1363050 which is less than1367000 , hence introducing Y28 is not a suitable solution.

Order Variable cost Inventory cost Hours Total cost Selling price Profit Z39 100 17050 0.7 400 1733000 31000 1367000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.