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Question: metters cabinets inc needs to choose a production method for...
Question details
Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data:
Process Type Annualized Fixed Cost of Plant &
Equipment Labor Material
Energy
Mass Customization $1,400,000
30 18 12
Intermittent $1,000,000 24
26 20
Repetitive $1,625,000 28
15 12
Continuous $1,960,000 25
15 10
Metters Cabinets projects an annual demand of 24,000 units for the Maxistand. The selling price for the Maxistand is $120 per unit.
a) Based on the projected annual demand, the best alternative available is to use the
Intermittent, Continuous, Repetetive, or Mass Customization (?)
process.
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