ACC113-SEC C_ASSIGNMENT & ANSWER CHAP 7 & 8 (14 Oct 2024)

Chap 7
30. Carbon dioxide emissions associated with a one-night stay in a hotel room are
calculated at 29.53 kg of CO2 per room day for an average hotel. The 200 rooms of your
hotel are all occupied for 2 days during a college football game.

a. How much CO2 did the guests and hotel release into the atmosphere?

OM manages the vast majority of processes and their associated supply (value) chains.
OM has direct responsibility for sustainability. The general manager of a hotel is an
operations manager.

CO2 released = (200 rooms/night)(2 nights) = (400 room days)(29.53 kg of CO2/room

day) = 11,812 kgs or at 1 kilogram = 2.2046 pounds then 26,041 pounds of CO2.

b. What work and leisure activities, and processes in the hotel generate CO2
emissions? Provide three examples and explain how carbon dioxide is emitted.

Example hotel processes that directly or indirectly release carbon dioxide into the
atmosphere include:

• Laundry services
• Air conditioning and heating
• Vending machines
• Room/cleaning//elevator service
• Building and equipment energy use
• Kitchen/meals/restaurant
• Televisions/fireplace/wi-fi
• Spa/pool/exercise room

34. Worthington Machining must decide whether to purchase Process A with specialized
metal folding equipment needing two employees to operate it or Process B with
general purpose folding equipment requiring five employees. Process A requires a
fixed cost of $1,430,000 and a variable cost of $14.32 per metal panel. Process B
requires a fixed cost of $820,000 and a variable cost of $20.05. Process A is more
automated than Process B.

a. What is the break-even quantity between these two processes?

Total cost (TC) = Fixed cost (FC) + Unit cost (C) x Quantity (Q)
FCA + CA x Q = FCB + CB x Q
$1,430,000 + $14.32Q = $820,000 + $20.05Q – 5.73Q = – $610,000
Q = 106,457 metal panels folded
 If demand is greater than 106,457 panels, adopt Process A. If demand is less
than 106,457, adopt Process B.

b. If predicted demand for next year is 120,000 panel folds, what process do you
recommend? What is the cost savings?

TCA = FCA + CA x Q = $1,430,000 + $14.32(120,000) = $3,148,400

TCB = FCB + CB x Q = $820,000 + $20.05(120,000) = $3,226,000

Cost difference (savings) (D) =

Total cost process A (TCA) – Total cost process B (TCB) (C.7)

D = $3,226,000 – $3,148,400 = $77,600 savings if adopt process A

38. Dot’s Restaurant must decide between two technology and processes in their kitchen.
They only serve dinner after 4 pm on a small island called Sanibel. The restaurant is open
250 days per year. Dot and her husband, Ham, are retired. They became bored playing golf
five times a week and decided to open this boutique restaurant. Process A uses an
induction oven and microwave process with a fixed cost of $44,000 and a variable cost of
$4.19 per meal. Process B uses a gas fired oven process with heating lamps with a fixed
cost of $28,000 and a variable cost of $5.86 per meal. Process A speeds up cooking and
delivery time. The average selling price per meal is $31.38.
a. What is the break-even quantity?
Q* = [FCB– FCA]/[CA – CB]
= [$28,000 - $44,000]/[$4.19 – $5.86] = -16,000/-1.67 = 9,581 meals
b. If the restaurant manager expects to sell 10,000 meals, which option, A or B, is best?
Justify.
Using Total cost (TC) = fixed cost (FC) + variable cost (VC) = FC + Q*VC1

Cost of Option A = [$44,000 + 10,000*$4.19] = $85,900

Cost of Option B = [$28,000 + 10,000*$5.86] = $86,600
Option A is the lowest cost solution and speeds up cooking and delivery time; it is
the best option.
c. Is the restaurant profitable if they purchase the process option you recommend
in part (b)?

Revenue = Demand (Q)*Price = 10,000*$31.38 = $313,800

Total cost of Process A = $85,900

Profit = $313,800 - $85,900 = $227,900

Yes, the boutique restaurant is very profitable, and Dot and Ham have met many
new friends. But running a restaurant is an around the clock job for 250 days a year.
Chap 8

35. Bass Fishing, Inc. assembles fishing nets with aluminum handles in an assembly
line using four workstations. Management wants an output rate of 200 nets per day
using a 7.5-hour workday. The sum of the task times is 7.00 minutes/net.

a. What is the cycle time?

C = A/R or C = (7.5 hours/day)(60 minutes/1 hour)/[(200 nets/day] = 450 min/day/200

nets/day = 2.25 min/net.

b. What is assembly-line efficiency?

Assembly Line Efficiency =  t/ (N*CT) = 7.00/(4*2.25) = 77.8%

c. What is total idle time?

Total Idle Time = N*CT -  t = 4(2.25) – 7.00 = 2.00 min.

Bass Fishing is paying for 2 minutes of idle time out of every 9.00 minutes to produce one
net. This is not so efficient and the work content should be redefined and better assembly
line work balances found. AB efficiency and total idle time are directly related to cost per
unit.

37. An assembly line with 30 activities is to be balanced. The total amount of time to
complete all 30 activities is 60 minutes. The longest activity takes 2.4 minutes and
the shortest takes 0.3 minutes. The line will operate for 480 minutes per day.

a. What are the maximum and minimum cycle times?

Maximum cycle time = 60 minutes; minimum cycle time = 2.4 minutes.

b. How much daily output will be achieved by each of those cycle times?

CT = A/R or R = 480/60 = 8 units/day; C = 480/2.4 = 200 units/day

38. In problem 37, suppose the line is balanced using 14 workstations and a finished
product can be produced every 4.5 minutes.

a. What is the production rate in units per day?

CT = A/R or 4.5 = 480/R or R = 106.7 units/day

b. What is the assembly line efficiency?

Efficiency = 60/[4.5(14)] = 95.2 percent efficiency.

 This is about as high efficiency assembly line balance that you would
achieve in the real world.