BUS FPX 4014 Assessment 2

Break-Even Analysis

It is important to determine the number of devices required to even break in order to assess the possibility of a professional business. A break-even analysis helps install optimal value points for a product, such as a pump.

Variables:

• Fixed cost: $100,000
• Convertible cost: $50
• Price: $100

Formula:

Beu = (p) vc) fc

Beu = \frac{$100,000}{($100 – $50)}

= 2000 bu = 2000

Contribution to Profit

Price per unit influences the surplus margin directly. The higher price per unit will lower the volume of sales; the profit can influence the margin and raise costs. Contribution to profit analysis determines the optimal price of sales.

Formula Used:

CP = (P) VC × UV effective Faction

Based on this analysis, the more profitable price point is $100 per pump.

CP = ($100 – $50) \bar3600

CP = $180,000 – $100,000

CP = $80,000

CP = ($110 – $50) \ \bar 2900

CP = $174,000 – $100,000

CP = $74,000

BUS FPX 4014 Assessment 2:Reliability of Product

The quality test measures the effectiveness of a product, whereas reliability determines its lifetime and minimizes the risk of testing returns or errors. The reliability of the product is calculated through the formula (Rp = R1 R2 R3 _ + _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ The calculation, the overall product, is reliability (.979).

,,

[RP = .979]

Reliability of Product with Subcomponents

Firms that manufacture multiple products need to evaluate the reliability of those products that contain subcomponents. Consumer confidence and loyalty are developed through a preference for quality and reliable products. Reliability of such products is established through the formula (RP = SC1R \ TIMES (1 – SC2R) \ TIMES (1 – SC3R)) \ TIMES \ TIMES SC4R). Based on calculations, the overall reliability of Sub-Center products is .901.

,,

[RP = .901]

Control Limits

The setup of control limits consists of upper and lower limits to track the performance of the product and identify ups and downs. The upper control limits (UCL = m + (3 \ sd)) and the too-low control range (LCL = m – (3 \ SD)). The calculation determines the upper control area at 30.111, and the lower control area at 29.901.

[UCL = 30.006 + (3 \_ times .035)]

[30.006 + .105]

[UCL = 30.111]

[Lcl = 30.006 – (3 \_ Times .035)]

[30.006 – .105]

[Lcl = 29,901]