16. Process Selection With Break-Even Analysis 6- Solving for Break-Even Point (Volume) TR = TC vp = c f + vc v vp - vc v = c f v ( p - c v ) = c f v = c f p - c v
17. Break-Even Analysis 6- Fixed cost = c f = $2,000 Variable cost = c v = $50 per unit Price = p = $100 per unit Break-even point is v = = = 40 units c f p - c v 2000 100 - 50
18. Break-Even Analysis: Graph 6- Total cost line Total revenue line Break-even point 40 Units $3,000 — $2,000 — $1,000 — Dollars
19. Process Selection – Multiple Processes 6- Below or equal to 400, choose A Above or equal to 400, choose B $2,000 + $50 v = $10,000 + $30 v $20 v = $8,000 v = 400 units Process A Process B
23. Operations Sheet for Plastic Part 6- Part name Crevice Tool Part No. 52074 Usage Hand-Vac Assembly No. 520 Oper. No. Description Dept. Machine/Tools Time 10 Pour in plastic bits 041 Injection molding 2 min 20 Insert mold 041 #076 2 min 30 Check settings 041 113, 67, 650 20 min & start machine 40 Collect parts & lay flat 051 Plastics finishing 10 min 50 Remove & clean mold 042 Parts washer 15 min 60 Break off rough edges 051 Plastics finishing 10 min
34. From Function to Process 6- Manufacturing Accounting Sales Purchasing Product Development Order Fulfillment Supply Chain Management Customer Service Function Process
35. Process Innovation 6- Strategic Directives Goals for Process Performance Pilot Study of New Design Detailed Process Map High - level Process map Goals Met? Innovative Ideas Design Principles Model Validation Customer Requirements Key Performance Measures Full Scale Implementation Baseline Data Benchmark Data No Yes