Variable Cost and Production Process

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MG 375 Test #1
Section 112 points each

1. Discuss briefly (about two sentences each) the following is reasons for outsourcing? A. Improve operating performance
Outsourcing help improve operating performance by ensuring that company focuses on doing what they know best and doing it to perfection. They also use parts from suppliers who also do what they do best instead of everyone doing half heart jobs.

B. Give employees a stronger career path
By allowing the company to just focus on what they know best it allows employees to become the experts at their job. It also allows for them know they specialty well enough to develop future improvements.

D. Turn fixed costs into variable costs
When you outsource you only pay for the products that you use. Instead of have fixed cost of stuff that aren’t being used to produce anything but still require you to produce them in order to be ready for your production process. Example when Ford own a steel mil it had the fix cost of the steel mil now that they don’t produce steel the they have the variable cost of buy steel when they need it. Need a little more about what are fixed vs. variable costs

E. Commercially exploit existing skills
By using outsourcing from subject matter experts a company can produce better products and improve their image. This will in turn increase their product demand because they have they quality from top manufactures in their products.

2.A simple project listing of five activities, their predecessors and their respective time estimates are presented below:

A simple project listing of five activities and their respective time estimates are presented below:
Using CPM, which activities make up the critical path?

Prepare a CPM diagram and determine:
(a) What is the Latest Finish Time for the last activity in this project (i.e., the total time to complete the project)? 1 3
1 B 3 6 6 8
A< 1 2 > D - E (Total time 8 days)
(b) What is the critical path?

A, B, D, E
3.What does the product-process matrix tell us? Provide a service and a manufacturing example for each ??? position on the matrix. Basically the matrix depicts that as volume of productions goes up then one must move from project layout style of manufacturing process to a more efficient and faster but less flexible manufacturing style like continuous process.

Project layout: This is when the product process is brought to the site of the manufacturing instead of bringing the product to be built to the manufacturing plant. Like when the new bridge was built in Beaufort all products and equipment were brought to the construction site. (low volume of production at one time)

Workcenter Layout: (Job shop) This where station with specific capabilities are setup and the product being assembled will move from station to have a specific process completed. Example Rolls Royce are built by hand and as it is built the car moves from one station to another were a expert team will complete the next step in the process of manufacturing. (Low production numbers)

Manufacturing Cell: This is where different groups are set up to assemble a specific part or parts of similarity at that one station. There might be many different stations within the plant. Example a circuit board plant may have one station build radio circuit board while another builder receiver circuit boards and so one. ( fast and higher production volumes but not the top of the line)

Assembly Line: Where one product move down a line where different step of the manufacturing process are completed along this assembly line without stopping to flow of anyone product. Example automotive assembly line the vehicle starts at the beginning and runs through the end and it does not stop from start to finish until the complete production is done. ( high and efficient production volume levels)

Continuous process: Manufacturing...
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