A production process consists of a three-step operation. The scrap rate is 19 pe

Question

A production process consists of a three-step operation. The scrap rate is 19 percent for the first step and 10 percent for the other two steps.

If the desired daily output is 488 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.)

If the scrap rate for each step could be cut in half, 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.)

If the scrap represents a cost of $10 per unit, how much is it costing the company per day for the original scrap rate? (Round your final answer to the nearest whole number. Omit the "$" sign in your response.)

A production process consists of a three-step operation. The scrap rate is 19 percent for the first step and 10 percent for the other two steps.

Explanation / Answer

(a)

x-x*0.19-0.1*0.19*x -0.1*0.1*0.19*x= 488

x =388/(1-0.19-0.1*0.19-0.1*0.1*0.19) = 491.6994 =492

Number of units = 492

(b)

saved =(491.6994*0.19-0.1*0.19*491.6994-0.1*0.1*0.19*491.6994)/2 = 41.93931 =42

(c)

Cost = (492-488)*10 = 40

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