Case study 1 Better Fitness. Inc. ( BFI ) . industries exercise equipment at its works in Freeport. Long Island. It late designed two cosmopolitan weight machines for the place exercising market. Both machines use BFI-patented engineering that provides the user with an highly broad scope of gesture capableness for each type of exercising performed. Until now. such capablenesss have been available merely on expensive weight machines used chiefly by physical healers. At a recent trade show. presentations of the machines resulted in important trader involvement.

In fact. the figure of orders that BFI received at the trade show far exceeded its fabrication capablenesss for the current production period. As a consequence. direction decided to get down production of the two machines. The two machines. which BFI named the BodyPlus 100 and the BodyPlus 200. require different sums of resources to bring forth. The BodyPlus 100 consists of a frame unit. a imperativeness station. and a pec-dec station. Each frame produced uses 4 hours of machining and welding clip and 2 hours of picture and finishing clip.

Each imperativeness station requires 2 hours of machining and welding clip and 1 hr of picture and finishing clip. and each pec-dec station uses 2 hours of machining and welding clip and 2 hours of picture and finishing clip. In add-on. 2 hours are exhausted piecing. proving. and boxing each BodyPlus 100. The natural stuff costs are $ 450 for each frame. $ 300 for each imperativeness station. and $ 250 for each pec-dec station ; packaging costs are estimated to be $ 50 per unit. The BodyPlus 200 consists of a frame unit. a imperativeness station. a pec-dec station. and a legpress station.

Each frame produced uses 5 hours of machining and welding clip and 4 hours of picture and finishing clip. Each imperativeness station requires 3 hours machining and welding clip and 2 hours of picture and finishing clip. each pec-dec station uses 2 hours of machining and welding clip and 2 hours of picture and finishing clip. and each legpress station requires 2 hours of machining and welding clip and 2 hours of picture and finishing clip. In add-on. 2 hours are exhausted piecing. proving. and boxing each Body-Plus 200.

The natural stuff costs are $ 650 for each frame. $ 400 for each imperativeness station. $ 250 for each pec-dec station. and $ 200 for each leg-press station ; packaging costs are estimated to be $ 75 per unit. For the following production period. direction estimates that 600 hours of machining and welding clip. 450 hours of picture and finishing clip. and 140 hours of assembly. proving. and packaging clip will be available. Current labour costs are $ 20 per hr for machining and welding clip. $ 15 per hr for picture and finishing clip. and $ 12 per hr for assembly. proving. and packaging clip.

The market in which the two machines must vie suggests a retail monetary value of $ 2400 for the BodyPlus 100 and $ 3500 for the BodyPlus 200. although some flexibleness may be available to BFI because of the alone capablenesss of the new machines. Authorized BFI traders can buy machines for 70 % of the suggested retail monetary value. BFI’s president believes that the alone capablenesss of the BodyPlus 200 can assist place BFI as one of the leaders in high-end exercising equipment. Consequently. he has stated that the figure of units of the BodyPlus 200 produced must be at least 25 % of the entire production.

Managerial Report Analyze the production job at Better Fitness. Inc. . and fix a study for BFI’s president showing your findings and recommendations. Include ( but do non restrict your treatment to ) a consideration of the undermentioned points: 1. What is the recommended figure of BodyPlus 100 and BodyPlus 200 machines to bring forth? 2. How does the demand that the figure of units of the BodyPlus 200 produced be at least 25 % of the entire production impact net incomes? 3. Where should attempts be expended in order to increase net incomes? Include a transcript of your additive scheduling theoretical account and graphical solution in an appendix to your study.

Case study 2 Hart Venture Capital ( HVC ) specializes in supplying venture capital for package development and Internet applications. Currently HVC has two investing chances: ( 1 ) Security Systems. a house that needs extra capital to develop an Internet security package bundle. and ( 2 ) Market Analysis. a market research company that needs extra capital to develop a package bundle for carry oning client satisfaction studies.

In exchange for Security Systems stock. the house has asked HVC to supply $ 600. 000 in twelvemonth 1. $ 600. 000 in twelvemonth 2. and $ 250. 000 in twelvemonth 3 over the coming three-year period. In exchange for their stock. Market Analysis has asked HVC to supply $ 500. 000 in twelvemonth 1. $ 350. 000 in twelvemonth 2. and $ 400. 000 in twelvemonth 3 over the same three-year period. HVC believes that both investing chances are deserving prosecuting. However. because of other investings. they are willing to perpetrate at most $ 800. 000 for both undertakings in the first twelvemonth. at most $ 700. 000 in the 2nd twelvemonth. and $ 500. 000 in the 3rd twelvemonth.

HVC’s fiscal analysis squad reviewed both undertakings and recommended that the company’s aim should be to maximise the net present value of the entire investing in Security Systems and Market Analysis. The net present value takes into history the estimated value of the stock at the terminal of the three-year period every bit good as the capital outflows that are necessary during each of the three old ages. Using an 8 % rate of return. HVC’s fiscal analysis squad estimates that 100 % support of the Security Systems undertaking has a net present value of $ 1. 800. 000. and 100 % support of the Market Analysis undertaking has a net present value of $ 1. 600. 000.

HVC has the option to fund any per centum of the Security Systems and Market Analysis undertakings. For illustration. if HVC decides to fund 40 % of the Security Systems undertaking. investings of 0. 40 ( $ 600. 000 ) _ $ 240. 000 would be required in twelvemonth 1. 0. 40 ( $ 600. 000 ) _ $ 240. 000 would be required in twelvemonth 2. and 0. 40 ( $ 250. 000 ) _ $ 100. 000 would be required in twelvemonth 3. In this instance. the net present value of the Security Systems undertaking would be 0. 40 ( $ 1. 800. 000 ) _ $ 720. 000. The investing sums and the net nowadays value for partial support of the Market Analysis undertaking would be computed in the same mode.

Managerial Report Perform an analysis of HVC’s investing job and fix a study that presents your findings and recommendations. Include ( but do non restrict your treatment to ) a consideration of the undermentioned points: 1. What is the recommended per centum of each undertaking that HVC should fund and the net present value of the entire investing? 2. What capital allotment program for Security Systems and Market Analysis for the coming three-year period and the entire HVC investing each twelvemonth would you urge? . What consequence. if any. would HVC’s willingness to perpetrate an extra $ 100. 000 during the first twelvemonth have on the recommended per centum of each undertaking that HVC should fund? 4. What would the capital allotment program look like if an extra $ 100. 000 is made available? 5. What is your recommendation as to whether HVC should perpetrate the extra $ 100. 000 in the first twelvemonth? Provide theoretical account inside informations Case study 3 Digital Imaging ( DI ) produces photo pressmans for both the professional and consumer markets.

The DI consumer division late introduced two exposure pressmans that provide colour prints equaling those produced by a professional processing lab. The DI-910 theoretical account can bring forth a 4? _ 6? borderless print in about 37 seconds. The more sophisticated and faster DI-950 can even bring forth a 13? _ 19? borderless print. Fiscal projections show profit parts of $ 42 for each DI-910 and $ 87 for each DI-950. The pressmans are assembled. tested. and packaged at DI’s works located in New Bern. North Carolina. This works is extremely automated and uses two fabrication lines to bring forth the pressmans.

Line 1 performs the assembly operation with times of 3 proceedingss per DI-910 pressman and 6 proceedingss per DI-950 pressman. Line 2 performs both the testing and packaging operations. Timess are 4 proceedingss per DI-910 pressman and 2 proceedingss per DI-950 pressman. The shorter clip for the DI-950 pressman is a consequence of its faster print velocity. Both fabricating lines are in operation one 8-hour displacement per twenty-four hours. Managerial Report Perform an analysis for Digital Imaging in order to find how many units of each pressman to bring forth. Fix a study to DI’s president showing your findings and recommendations.

Include ( but do non restrict your treatment to ) a consideration of the followers: 1. The recommended figure of units of each pressman to bring forth to maximise the entire part to gain for an 8-hour displacement. What grounds might direction hold for non implementing your recommendation? 2. Suppose that direction besides states that the figure of DI-910 pressmans produced must be at least every bit great as the figure of DI-950 units produced. Assuming that the aim is to maximise the entire part to gain for an 8-hour displacement. how many units of each pressman should be produced?

3. Does the solution you developed in portion ( 2 ) balance the entire clip spent on line 1 and the entire clip spent on line 2? Why might this balance or deficiency of it be a concern to direction? 4. Management requested an enlargement of the theoretical account in portion ( 2 ) that would supply a better balance between the entire clip on line 1 and the entire clip on line 2. Management wants to restrict the difference between the entire clip on line 1 and the entire clip on line 2 to 30 proceedingss or less. If the aim is still to maximise the entire part to gain. how many units of each pressman should be produced?

What consequence does this work load equilibrating have on entire net income in portion ( 2 ) ? 5. Suppose that in portion ( 1 ) direction specified the aim of maximising the entire figure of pressmans produced each displacement instead than entire net income part. With this aim. how many units of each pressman should be produced per displacement? What consequence does this aim have on entire net income and work load reconciliation? For each solution that you develop. include a transcript of your additive scheduling theoretical account and graphical solution in the appendix to your study.