MGSC 395 Exam 1 Timothy Fry Questions With Verified Answers

Break Even Analysis - Answer Analysis to compare processes by finding the volume at which two different processes have equal total costs. pQ = F + cQ Break Even Quantity - Answer The volume at which total revenues equal total costs. Variables for Break Even - Answer Variable cost (c) The portion of the total cost that varies directly with volume of output. Fixed cost (F) The portion of the total cost that remains constant regardless of changes in levels of output. Quantity (Q) The number of customers served or units produced per year. Total cost equation - Answer Total cost = F + cQ Total Revenue Equation - Answer Total revenue = pQ Quantity Equation - Answer Q= F/(p-c) A hospital is considering a new procedure to be offered at $200 per patient. The fixed cost per year would be $100,000 with total variable costs of $100 per patient. What is the break-even quantity for this service? Use both algebraic and graphic approaches to get the answer. - Answer 1000 patients variables for buy/make options - Answer F sub b The fixed cost (per year) of the buy option F sub m The fixed cost of the make option c sub b The variable cost (per unit) of the buy option c sub m The variable cost of the make option total costs to make/buy - Answer -Total cost to buy Fb + cbQ -Total cost to make Fm + cmQ Q= (Fm-Fb)/(cb-cm) A fast-food restaurant featuring hamburgers is adding salads to the menu The price to the customer will be the same Fixed costs are estimated at $12,000 and variable costs totaling $1.50 per salad Preassembled salads could be purchased from a local supplier at $2.00 per salad Preassembled salads would require additional refrigeration with an annual fixed cost of $2,400 Expected demand is 25,000 salads per year What is the break-even quantity? - Answer ()/(2-1.50)=19200 salads Operations Management - Answer The systematic design, direction, and control of processes that transform inputs into services and products for internal, as well as external, customers supply chain management - Answer The synchronization of a firm's processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demand Supply chain - Answer An interrelated series of processes within and across firms the produces a service or product to the satisfaction of customers manufacturing process vs. service process - Answer manufacturing: Physical, durable output, Output can be inventoried, Low customer contact, Long response time, Capital intensive, Quality easily measured service: Intangible, perishable output, Output cannot be inventoried, High customer contact, short response time, Labor intensive, Quality not easily measured Supply Chain View - Answer Each activity in a process should add value to the preceding activities; waste and unnecessary cost should be eliminated Supplier relationship process - Answer - A process that selects the suppliers of services, materials, and information and facilitates the timely and efficient flow of these items into the firm New service/product development - - Answer A process that designs and develops new services or products from inputs from external customer specifications or from the market Order fulfillment process - - Answer A process that includes the activities required to produce and deliver the service or product to the external customer Customer relationship process - - Answer A process that identifies, attracts and builds relationships with external customers and facilitates the placement of orders by customers (customer relationship management) Support Processes - - Answer Processes like Accounting, Finance, Human Resources, Management Information Systems and Marketing that provide vital resources and inputs to the core processes