Dandy Collectibles is opening a new warehouse. Bob Lee, the warehouse manager, is trying to determine the labor compensation package that most productively utilizes resources. The typical compensation plan offers an hourly wage rate of $13. Mr. Lee is also considering an incentive plan. The incentive plan rewards solely on performance with order pickers earning $0.40/unit prepared for shipping. A typical week shows the number of ordered units that must be prepared for shipping.
Errors sometimes happen in Dandy’s order picking. Product mishandling occurs in 1% of the orders under the incentive plan and in 0.5% of the orders under the hourly wage plan. Errored orders are scrapped and result in lost revenue of $60 per occurrence. Hourly workers pick 20 units per hour. Incentive workers pick 28 units per hour. Regardless of the plan designation, employees work 40-hour weeks. Union restriction prevent Dandy from operating on Saturday and Sunday. The labor union also restricts Dandy from hiring part-time workers. Orders need not be filled daily, but all orders must be shipped by week’s end (Friday). Assume that hiring and training costs are negligible.
a. How many workers are needed under each plan for the typical week’s demand?
b. Which plan meets the typical week’s demand at the lowest cost, including lost sales resulting from errors?
Answers: 1
Business, 22.06.2019 19:30, jaybeast40
Oz makes lion food out of giraffe and gazelle meat. giraffe meat has 18 grams of protein and 36 grams of fat per pound, while gazelle meat has 36 grams of protein and 18 grams of fat per pound. a batch of lion food must contain at least "46,800" grams of protein and 70,200 grams of fat. giraffe meat costs $1/pound and gazelle meat costs $2/pound. how many pounds of each should go into each batch of lion food in order to minimize costs? hint [see example 2.]
Answers: 1
Business, 22.06.2019 22:00, emilyswinge4421
Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)
Answers: 3
Dandy Collectibles is opening a new warehouse. Bob Lee, the warehouse manager, is trying to determin...
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