A production process consists of a three-step operation. The scrap rate is 13 pe

Question

A production process consists of a three-step operation. The scrap rate is 13 percent for the first step and 9 percent for the other two steps. a.If the desired daily output is 454 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.) Number of units b.If the scrap rate for each step could be cut in half at every operation, how many units would this save in terms of the scrap allowance? (Do not round intermediate calculations. Round up your final answer to the next whole number.) Number of units c.If the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate (i.e. the Part a scrap rate)? (Round your final answer to the nearest whole number. Omit the "$" sign in your response.) Cost $

Explanation / Answer

If there are 1000 units. to start with
1000 x (100% - 13%) = 1000x 0.87 =870 units after the first step
870 x (100% - 9%) =870 x 0.91= 791.7 units after the second step
791.7 x (100% - 9%) = 791.7 x 0.91 =720.447 Or 721 units after the third step

a.

721 is the output when there are 1000 units

For 454 units, the units would be

454 x (1000 / 721) = 629.68 Or 630 units to start with

b.

If there are 1000 units. to start with

1000 x (100% - 6.5%) = 935 units after the first step
935 x (100% - 4.5%) = 935 x 0.955= 892.925 units after the second step
892.925 x (100% - 4.5%) =892.925 x 0.955 = 852.743 units after the third step

Or rounding off, answer is 853 units to start with

853 is the output when there are 1000 units

For 454 units, the units would be

454 x (1000 / 853) = 532.24 or 532 units to start with under the improved method

630 - 532 = 98 units saved

c.

(630 - 454) units x $10 = $ 1760 daily cost in scrapped units

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.