1. NanoTech is ready to begin production of its exciting new technology. The company is evaluating three methods of production: (A) a small production facility with older equipment, (B) a larger production facility that is more automated, and (C) subcontracting to an electronics manufacturer in Singapore. Process A has a fixed cost of $200,000 and a variable cost of $40 per unit. Process B has a fixed cost of $600,000 and a variable cost of $20 per unit. Process C has no fixed cost since the item is purchased. It's variable cost is the purchase price of $60 per unit. For what levels of demand would each process be desirable?
Below 30,000, choose B. Above 50,000, choose A. Otherwise, choose C.
Below 20,000, choose A. Above 10,000, choose C. Otherwise, choose B.
Below 15,000, choose C. Above 20,000, choose A. Otherwise, choose B.
Below 10,000, choose C. Above 20,000, choose B. Otherwise, choose A.
2. The school cafeteria can make pizza for approximately $0.30 a slice. The cost of kitchen use and cafeteria staff runs about $200 per day. The Pizza Den nearby will deliver whole pizzas for $9.00 each. The cafeteria staff cuts the pizza into eight pieces and serves them in the usual cafeteria line. With no cooking duties, the staff can be reduced by half, for a ?xed cost of $75 per day. Should the school cafeteria make or buy its pizzas?
Buy if more than 14 students want pizza
Buy if more than 66 students want pizza
Buy if less than 152 students want pizza
Buy if more than 416 students want pizza
None of the above