Wgu Task 3 Jgt2 Decision Making

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Decision Analysis Task3 A. Manufacturing the Samba Sneakers cost-effectively is very important for the organization. The best option for the organization would be to manufacture the sneaker with the lowest cost for every 1,000 sneaker produced The options to manufacture are: 1. Recondition the existing equipment with fixed cost of $50,000, variable cost of $1000 for every 1,000 sneaker. 2. Buy New Equipment with fixed cost of $200,000, variable cost of $500 for every 1,000 sneaker. 3. Outsource with no fixed cost, with variable cost of $3000 for every 1,000 sneaker. Based on volume output the best option to cost-effectively manufacture the Samba Sneakers would be to buy New Equipment with fixed cost of $200,000, variable cost of $500 for every 1,000 sneaker. -Buying new equipment has the lowest cost option for a volume over 300 sneakers manufactured. The breakeven points for each option are as follows: BREAKEVEN POINTS Units Dollars Reconditioned vs. New Equipment 300 350000 Reconditioned vs. Outsource 25 75000 New Equipment vs. Outsource 80 240000 However, buying New Equipment has the lowest cost according to the graph for volumes over 300 sneakers. (See Graph) A1. A1a. The decision analysis tool to Buy New Equipment is the best fit for the organization. Buying New Equipment provides the lowest cost based on volume for producing the Samba Sneaker. According to the graph, Buying New Equipment would be more cost-effective for the organization based on volumes of output with a lower cost for the organization when compared to Reconditioning existing equipment or Outsourcing. Therefore, Buying New Equipment with fixed cost of $200,000 variable cost of $500 for every 1,000 sneaker is more cost-effective for the organization. B. The future periods of sales are displayed for periods 10-21 along with forecasted sales for each period. Within the Least-Squares

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