a manufacturing firm has received a contract to assemble 1000 units of test equi

Question

a manufacturing firm has received a contract to assemble 1000 units of test equipment in the next year. the firm must decide how to organize its assemble operation. skilled workers, at $33 per hour each, could be assigned to individually assemble the test equipment. each worker would do all the assemble steps, and it would take 2.6 hour to complete one unit. an alternate approach would be to set up teams of four less skilled workers (at $19 per hour each) and organize the assemble takes so that each worker does part of assemble. the four man team would be able to assemble a unit in one hour. Cost per unit if the skilled worker is used. ? Cost per unit if the unskilled workers are used?

Explanation / Answer

cost per unit=2.6*33 total cost =1000*2.6*33=85800 using alternate approach alternate cost=4*19=76 total cost=76000

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