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    Production and Operation MGT MID TERM Project 2 2

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    David Sharma
    1. The document contains two short answer questions regarding production and operation management. 2. The first question compares Machine A and B and asks which would have a lower cost per unit if run for a year or to produce 4000 pieces. Machine B is cheaper if run all year, while Machine A is cheaper to produce 4000 pieces. 3. The second question compares production Methods P and Q, asking which would be cheaper over one year given production requirements and costs. Method Q is determined to have a lower total manufacturing cost per year and is therefore the recommended choice.

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    Production and Operation MGT MID TERM Project 2 2

    Uploaded by

    David Sharma
    36 views4 pages
    1. The document contains two short answer questions regarding production and operation management. 2. The first question compares Machine A and B and asks which would have a lower cost per unit if run for a year or to produce 4000 pieces. Machine B is cheaper if run all year, while Machine A is cheaper to produce 4000 pieces. 3. The second question compares production Methods P and Q, asking which would be cheaper over one year given production requirements and costs. Method Q is determined to have a lower total manufacturing cost per year and is therefore the recommended choice.

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    Production and Operation Mgt MID TERM Project 2 2

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    1. The document contains two short answer questions regarding production and operation management. 2. The first question compares Machine A and B and asks which would have a lower cost per unit if run for a year or to produce 4000 pieces. Machine B is cheaper if run all year, while Machine A is cheaper to produce 4000 pieces. 3. The second question compares production Methods P and Q, asking which would be cheaper over one year given production requirements and costs. Method Q is determined to have a lower total manufacturing cost per year and is therefore the recommended choice.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views4 pages

    Production and Operation MGT MID TERM Project 2 2

    Uploaded by

    David Sharma
    1. The document contains two short answer questions regarding production and operation management. 2. The first question compares Machine A and B and asks which would have a lower cost per unit if run for a year or to produce 4000 pieces. Machine B is cheaper if run all year, while Machine A is cheaper to produce 4000 pieces. 3. The second question compares production Methods P and Q, asking which would be cheaper over one year given production requirements and costs. Method Q is determined to have a lower total manufacturing cost per year and is therefore the recommended choice.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Form no: IQAC /10 (a)

    PROGRAM:
    BACHELOR OF BUSINESS ADMINISTRATION

    Subject PRODUCTION AND OPERATION MANAGEMENT

    Subject Code BBA 403


    Semester/Year 4th Semester
    Section A

    Project No. 1

    Project title SHORT ANSWER QUESTIONS

    COs Covered CO1, CO2

    Student’s Name DAVID SHARMA


    Students Enroll. No. ASB/BBA/21/015

    Student’s Signature* david

    Submission Date 05.05.23


    Due Date 06.05.23
    Faculty Name Prof. Soma Das
    Marks Assigned by the
    Faculty

    Signature

    Comments by the Faculty:

    *By signing above, you attest that you have contributed to this submission and confirm
    that all work you have contributed to this submission is your own work. Any suspicion
    of copying or plagiarism in this work will result in an investigation of Academic
    Misconduct and may result in a “0” on the work, or possibly more severe penalties, as
    well as a Disciplinary Notice on your academic record.
    Form no: IQAC /10 (a)

    1. Machines A and B are both capable of manufacturing a product. They compare as follows: -

    Machine A Machine B
    Investment Rs. 50,000 Rs. 80,000
    Interest on capital 15% per annum 15% per annum
    invested
    Hourly charges Rs. 10 Rs. 8
    (wages+power)
    No. of pieces produced 5 8
    per hour
    Annual operating hours 2000 2000

    (i) Which machine will have the lower cost per unit of output, if run for the whole year?

    Machine A Machine B
    Annual interest charges 50,000 × (15/100) = 7,500 80,000× (15/100) = 12,000

    Annual operating charges 10×2,000 = 20, 000 8×2,000= 16,000


    Total annual charges 7,500+20,000 = 27,500 12,000+16,000= 28,000
    Annual production (units) for2,000 5×2,000 =10,000 nos. 8× 2000=16,000 nos.
    hours
    Cost per unit = 2. 75 = 1.75

    Machine “B” gives the lower cost per unit if run for the whole year (for 2000 hours).

    (ii) If only 4000 pieces are to be produced in a year, which machine would have the lower cost per
    piece?

    Machine A Machine B
    Operating hours required for producing4000 4000/5 = 800 hrs. 4000/8 = 500 hrs.
    nos.
    Operating charges 10 x 800 = 8, 000 8 x 500 = 4,000
    Interest charges 7,500 12,000
    Total annual charges 8000 + 7,500 = 15,500 4000 + 12,000= 16,000

    Cost per unit = 19.375 = 32

    Machine “A” gives lower cost per unit.


    Form no: IQAC /10 (a)

    2. Methods P and Q are both capable of manufacturing a product. They compare as follows:

    Data Method P Method Q


    Fixture-------- Cost 24, 000 rupees 16,000 rupees
    Fixture--------- Life 6 months 4 months
    Tooling-------- Cost 2,560 rupees 4,800 rupees
    Tooling--------- Life 300 pieces 500 pieces
    Processing time per piece 6 minutes 4 minutes

    The annual requirement is 1500 nos. Operating cost per hour of the process is Rs. 128 for bothprocesses.
    Material cost is same in each case.

    Which method would you choose for production during a period of one year?

    Data Method P Method Q


    Cost of manufacture per year:
    Fixture cost 24,000 × 2 = 48,000 16,000 × 3 = 48,000
    (2 nos of fixtures are required per year in method P and 3 nos required in method Q)
    Tooling cost 2,560 × 1,500 /300 = 2,560 × 5 = 4,800 × 1500/ 500 = 4800 × 3 =
    12,800 14,400

    Operating hours to produce 1,500nos. 1,500 × 6/60 =150 hrs. 1,500 × 4/60 =100 hrs.

    Operating cost per year 128 × 150 = 19,200 128 × 100 = 12,800
    Total manufacturing cost per year 48,000 + 12,800 + 19,200 = 80,000 48,000 + 14,400 + 12,800 = 75,200

    Since method ‘Q’ is cheaper than method ‘P’, method ‘Q’ is the choice for production during
    the whole one-year period.
    Form no: IQAC /10 (a)

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