# Operations Management Homework

Topics: Costs, Variable cost, Fixed cost Pages: 3 (318 words) Published: November 17, 2011
1. A book publisher has fixed costs of \$300000 and variable costs per book of \$8.00. The book sells for \$23.00 per copy. a. How many books must be sold to break even?
Break-even demand = Total fixed cost / Unit price – Variable cost per unit
= \$300,000/ \$23 – \$8
= 20,000
b. If the fixed cost increased, would the new break-even point be higher or lower? From the formula given above: When fixed cost increased, the break-even point is higher.

c. If the variable cost per unit decreased, would the new break –even point be higher or lower?

When variable cost per unit decreased, the break-even point is lower.

2. An assembly line is to operate eight hours per day with a desired output of 240 units per day. The following table contains information on this product’s task times and precedence relationship: Task| Task Time (s)| Immediate Predecessor |

A| 60| -|
B| 80| A|
C| 20| A|
D| 50| A|
E| 90| B,C|
F| 30| C,D|
G| 30| E,F|
H| 60| G|
a. Draw the precedence diagram
B

B

80
E

E

90
60A

A

C

C

H

H

G

G

F

F

20
D

D

30 60
30
50

b. What is the work station cycle time?
C= Production time per period / Required output per period
= 8 hr * 3600 s/hr / 240 units
= 120 s/unit
c. Balance this line using the longest task time
Nt = T/C = 420s/unit / 120s/unit = 3.5 = 4
2| BC| 8020| 20|
3| EF| 9030| 0|
4| GH| 3060| 30|

d. What is the efficiency of your line balance?
Efficiency = Sum of task times (T) / Actual number of work stations (Na) * C
= (60+80+20+50+90+30+30+60)s / 4*120s/unit
= 420/480 = 0.875