Thinking Skills: Critical Thinking and Problem Solving

338 Answers to assignments

Costs per year over     4    years

Manual Auto (99%) Auto (95%)

Production 500,000 500,000 500,000

Unit sale value $ 2 2 2

Unit compensation cost $ 25 25 25

Labour cost $ 40,000 0 0

Machine cost $ 0 45,000 45,000

Redundancy cost $ 0 2500 2500

Failure rate 0.01 0.01 0.01

Detection rate 0.9 0.99 0.95

Number faulty 5000 5000 5000

Faulty and detected 4500 4950 4750

Faulty and sent out 500 50 250

Total sent out 495,500 495,050 495,250

Income from sales $ 991,000 990,100 990,500

Compensation costs $ 12,500 1250 6250

Total costs $ 52,500 48,750 53,750

Net income $ 938,500 941,350 936,750