Assignment # 3

Operation and
Production
Management

Submitted to Cdr (r) Azhar Nisar

Submitted by: Ameer Ahmed Khan

Class: BBA-6A
Reg No: 36313
Question no 5
Part A
We have
300,000+ 600x = 120,000 + 900x
x =180,000/300
x = 600

Part B
Total cost of A = 300,000 + 600(800) = $780,000
Total cost of B = 120,000 + 900(800) = $840,000

The difference between total cost of A and B $60,000.

Question no 8
Revenue = 10*30,000 = $300,000
Total cost if add new equipment = 140,000 + 5(30,000) = $290,000
The profit would be 300,000-290,000= $10,000
So the company should buy the new equipment before after adding new
equipment company can bear its changed fixed cost.

Question no12
Performance
criteria
Capital
equipment
investment
requires
Expected
return on
investment
(ROI)
Compatibility
with current
workforce skills
Competitive
advantages
Compatibility
with EPA
requirement

Weightages

Rating

20

Service A
0.6

Service B
0.8

Service C
0.3

20

0.7

0.3

0.9

20

0.4

0.7

0.5

20

1.0

0.4

0.6

20

0.2

1.0

0.5

Solution
Service A
12
14
8
20
4
58

Service B
16
6
14
8
20
64

Service C
6
18
10
12
10
56

Select service B.
If ROI is twice the weight

Service A

Solution
Service B

Service C

9.99
23.33
6.66
16.66
3.33

13.33
9.99
11.66
6.66
16.66

59.97

4.99
29.99
8.33
9.99
8.33

58.3

61.63

Select Service C
By changing the weightage of ROI the result has been changed.

Question no 13

Performance
criteria

Weightag
es

Compatibility
with current
manufacturing
Expected return
on investment
(ROI)
Compatibility
with current
workforce skills
Unit profit
margin

Product A
320
30
90
280
720

40

Product
A
8

Product
B
7

Ratings
Product
C
3

Product
D
6

Product
E
9

10

10

40

Product B
280
80
50
240
650

Select Product A and E.

Solution
Product C
120
40
70
360
590

Product D
240
70
60
80
450

Product E
360
70
50
280
760

Question no 18

Low [0.25]
$128,500

Avg [0.40]
High [0.35]

Small
[0.25
1

Medium

Large

$153,0
00

$112,000

Expand
$18,000
75,000+60,
000=$135,0
00
75,000+125,
000=$200,00
0

$140,00

[0.35]

150,000+145,
000
=$295,000

[0.25]

($60,000

[0.40]

$125,00

[0.35]

Not
expand
Avg

$220,000

We select Medium event Node i.e. $

153,000

$0
$60,000

Large size

($25,000

[0.40]

$60,000

$120,000
Expand

$145,000

4
Not
expand

$0