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Kultur Dokumente
14-1
Cross-functional
management teams
who make
production, marketing,
and finance decisions
Make substantive
economic decisions
affecting operations
14-2
Exh.
14-1
Quantitative
Analysis
Qualitative
Considerations
Accurate
Information must
be precise.
Timely
Available in time
for a decision
6. Make a Decision
14-5
Relevant Information
Information is relevant to a decision
problem when . . .
It has a bearing on the future,
It differs among competing alternatives.
14-6
Identifying Relevant
Costs and Benefits
Sunk costs
Costs that have already been incurred.
They do not affect any future cost and
cannot be changed by any current or future
action.
Relevant Costs
Worldwide Airways is thinking about replacing a
three year old loader with a new, more efficient
New loader
loader.
List price
Annual operating expenses
Expected life in years
Old loader
Original cost
Remaining book value
Disposal value now
Annual variable expenses
Remaining life in years
$ 15,000
45,000
1
$ 100,000
25,000
5,000
80,000
1
14-8
Relevant Costs
Ke e p Old
Loade r
$ 25,000
Re place Old
Loade r
Diffe re n tial
Cos t
14-9
Relevant Costs
Ke e p Old
Loade r
$ 25,000
Re place Old
Loade r
Diffe re n tial
Cos t
14-10
Relevant Costs
Ke e p Old
Loade r
$ 25,000
Re place Old
Loade r
Diffe re n tial
Cos t
14-11
Relevant Costs
De pre ciation of old loade r
Write -off of old loade r
P roce e ds from s ale of old loade r
De pre ciation of n e w loade r
Ope ratin g cos ts
Total cos ts
Ke e p Old
Loade r
$ 25,000
Re place Old
Loade r
$
80,000
$ 105,000
25,000
(5,000)
15,000
45,000
80,000
Diffe re n tial
Cos t
$
5,000
(15,000)
35,000
25,000
14-12
Relevant Costs
Here is an analysis that includes only relevant
costs:
14-14
250,000
30,000
$
280,000
190,000
90,000
90,000
100,000
$ 150,000
$ 90,000
(5,000)
85,000
$ 65,000
14-18
$ 150,000
$ 90,000
(5,000)
85,000
80,000
165,000
$ (15,000)
14-21
0.06
0.04
0.04
0.04
0.07
0.25
14-22
0.06
0.04
0.04
0.04
0.07
0.25
Savings from
Outsourcing
$
0.06
0.04
0.04
0.01
0.15
14-23
14-24
14-25
14-26
$200,000
(135,000)
65,000
( 75,000)
$ ( 10,000)
14-27
14-28
ELIMINATE DIFFERENTIAL
0
$200,000
0
(70,000)
0
(40,000)
0
(25,000)
0
65,000
(30,000)
0
0
(20,000)
(10,000)
0
0
( 5,000)
(10,000)
0
(50,000)
40,000
14-29
ELIMINATE DIFFERENTIAL
0
$200,000
A
0
(70,000)
V
0
(40,000)
O
0
(25,000)
I
0
65,000
D
(30,000)
0
A
0
(20,000)
(10,000) B
0
L
0
( 5,000)
(10,000) E
0
(50,000)
40,000
14-30
14-31
Limited Resources
Martin, Inc. produces two products and
selected data is shown below:
Selling price per unit
Less: variable expenses per unit
Contribution margin per unit
Current demand per week (units)
Contribution margin ratio
Processing time required
on the lathe per unit
Products
Highs
Webs
$
60
$
50
36
35
$ 24
$ 15
2,000
2,200
40%
30%
1.00 min.
0.50 min.
14-34
Limited Resources
The lathe is the scarce resource because
there is excess capacity on other
machines. The lathe is being used at
100% of its capacity.
The lathe capacity is 2,400 minutes per
week.
Limited Resources
Lets calculate the contribution margin per unit
of the scarce resource, the lathe.
Products
Contribution margin per unit
Time required to produce one unit
Contribution margin per minute
Webs
$
24
1.00 min.
$
24 min.
Highs
?
?
?
14-36
Limited Resources
Lets calculate the contribution margin per unit
of the scarce resource, the lathe.
Products
Contribution margin per unit
Time required to produce one unit
Contribution margin per minute
Highs
Webs
$
24
$
15
1.00 min.
0.50 min.
$
24 min.
$
30 min.
14-37
Limited Resources
Lets calculate the contribution margin per unit
of the scarce resource, the lathe.
Products
Contribution margin per unit
Time required to produce one unit
Contribution margin per minute
Highs
Webs
$
24
$
15
1.00 min.
0.50 min.
$
24 min.
$
30 min.
Limited Resources
Lets calculate the contribution margin per unit
of the scarce resource, the lathe.
Products
Contribution margin per unit
Time required to produce one unit
Contribution margin per minute
Highs
Webs
$
24
$
15
1.00 min.
0.50 min.
$
24 min.
$
30 min.
Limited Resources
Lets see how this plan would work.
Allotting the Scarce Resource The Lathe
Weekly demand for Highs
2,200 units
Time required per unit
x .50 minutes
Time required to make Highs 1,100 minutes
Total lathe time available
Time used to produce Highs
Time available for Webs
Time required per unit
Production of Webs
2,400 minutes
1,100 minutes
1,300 minutes
x 1.00 minute
1,300 units
14-40
Limited Resources
According to the plan, Martin will produce
2,200 Highs and 1,300 Webs. Martins
contribution margin looks like this.
Production and sales (units)
Contribution margin per unit
Total contribution margin
Webs
1,300
$
24
$ 31,200
Highs
2,200
$
15
$ 33,000
Sunk
costs.
Opportunity
costs.
14-42