Essays on Operations And Quality Management Assignment

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Question Number 6: A & Z Lettuce ProductsBreak-Even Quantity for the Manual Process: In Break-Even, no profits / LossesOr Total Revenue=Total CostTotal Revenue-Total Cost=0Total Revenue=Total Cost$2.50X=$37,500+$1.75X$2.50X-$1.75X=$37,500$0.75X=$37,500X=$50,000Revenue at the Break-Even Quantity for the Manual Process: Let X be the quantity produced by the A & Z Lettuce ProductsTotal Revenue–Total Cost=Profits / LossesTotal Revenue=Price(Output)Total Revenue=$2.50(X)Total Revenue=$2.50($50,000)Total Revenue=$125,000Total Cost=Fixed Cost+Variable CostTotal Cost=$37,500+$1.75 (X)Break-Even Quantity for the Mechanized Process: In Break-Even, no profits / LossesOr Total Revenue=Total CostTotal Revenue-Total Cost=0Total Revenue=Total Cost$2.50X=$75.000+$1.25X$2.50X-$1.25X=$75.000$1.25X=$75.000X=$60,000Revenue at the Break-Even Quantity for the Mechanized Process: Let X be the quantity produced by the A & Z Lettuce ProductsTotal Revenue–Total Cost=Profits / LossesTotal Revenue=Price(Output)Total Revenue=$2.50(X)Total Revenue=$2.50($60,000)Total Revenue=$150,000Total Cost=Fixed Cost+Variable CostTotal Cost=$75,000+$1.25 (X)Monthly Profit or Loss of the Manual Process if They Expect to Sell 60,000 Bags of Lettuce per Month: If X = 60,000Total Revenue–Total Cost=Profits / Losses$2.50 (60,000)-($37,500 + ($1.75) ( 60,000)=Profit$150,000-(142,500)=Profit$7,500=ProfitMonthly Profit or Loss of the Mechanized Process if They Expect to Sell 60,000 Bags of Lettuce per Month: If X = 60,000Total Revenue–Total Cost=Profits / Losses$2.50 (60,000)-($75,000 + ($1.25) ( 60,000)=Profit$150,000-(150,000)=0Quantity that Zan and Angela be indifferent to the process selected: Manual$2.50X-($37,500+$1.75X)=0$2.50X-$1.75-$37,500=0$0.75-$37,500=0Mechanical$2.50X-($75,000+$1.25)=0$2.50X-$75,000-$1.25X=0-$1.25X-$75,000=0Range of Demand that Manual Process be Preferred Over the Manual Process: Manual=Mechanical0.75 X-37,500=1.25 X-75,000- 37,500+75,000=1.25 X-0.75 X37,500=0.5 X75,000=XCheck Manual, =2.50 (75,000)-[37,500+1.75(75,000)]=187,500-168,750=18,750Check Mechanical, =2.50 (75,000)-[75,000+1.25(75,000)]=187,500-168,750=18,750

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