BUS FPX 4014 Assessment 2 Manufacturing Decisions
Phillip March 6, 2024 No Comments

BUS FPX 4014 Assessment 2 Manufacturing Decisions

BUS FPX 4014 Assessment 2 Manufacturing Decisions

Name

Capella university

BUS-FPX4014 Operations Management for Competitive Advantage

Prof. Name

Date

Break Even Analysis

Determining the number of units required to break even is crucial for assessing the viability of a business venture. A break-even analysis helps in establishing the optimal price point for a product, such as a pump.

Variables:

  • Fixed Cost: $100,000
  • Variable Cost: $50
  • Price: $100

Formula:

BEU = \frac{$100,000}{($100 – $50)}

���=2,000

Contribution to Profit

The selling price of a product directly affects profit margins. A higher price per unit may lead to lower sales volume, impacting profit margins and increasing overhead costs. A contribution to profit analysis helps determine the ideal selling price.

Formula Used:

Based on this analysis, the more profitable price point is $100 per pump.

CP = ($100 – $50) \times 3600

CP = $180,000 – $100,000

CP = $80,000

CP = ($110 – $50) \times 2900

CP = $174,000 – $100,000

CP = $74,000

Reliability of Product

Quality testing evaluates a product’s functionality, while reliability testing assesses its longevity, minimizing the risk of returns or defects. Product reliability is determined using the formula ( RP = R1 \times R2 \times R3 \times R4 \times R5 ). Based on calculations, the overall product reliability is ( .979 ).

[ RP = .997 \times .998 \times .995 \times .999 \times .990 ] [ RP = .979 ]

Reliability on Product with Subcomponents

Assessing the reliability of products with subcomponents is essential for companies producing multiple products. Prioritizing quality and reliability assurance builds consumer trust and loyalty. The reliability of such products is determined using the formula ( RP = SC1R \times (1 – (1 – SC2R) \times (1 – SC3R)) \times SC4R ). Based on calculations, the overall reliability of products with subcomponents is ( .901 ).

[ RP = 0.97 \times (1 – (1 – 0.98) \times (1 – 0.95)) \times 0.93 ] [ RP = .901 ]

Control Limits

Establishing control limits involves setting upper and lower bounds to monitor product performance and detect fluctuations. The formula for upper control limits is ( UCL = M + (3 \times SD) ), and for lower control limits is ( LCL = M – (3 \times SD) ). Based on calculations, the upper control limit is ( 30.111 ), and the lower control limit is ( 29.901 ).

[ UCL = 30.006 + (3 \times .035) ] [ 30.006 + .105 ] [ UCL = 30.111 ] [ LCL = 30.006 – (3 \times .035) ] [ 30.006 – .105 ] [ LCL = 29.901 ]

BUS FPX 4014 Assessment 2 Manufacturing Decisions