A production process consists of a threestep operation The s

A production process consists of a three-step operation. The scrap rate is 10 percent for the first step and 6 percent for the other two steps. If the desired daily output is 450 units, how many units must be started to allow for loss due to scrap? (Do not round intermediate calculations. Round up your final answer to the next whole number.) If the scrap rate for each step could be cut in half at every operation, how many units would this save in terms of the scrap allowance? (Do not round intermediate calculations. Round up your final answer to the next whole number.) If the scrap represents a cost of $10 per unit, how much is it costing the company per day tor the original scrap rate (i.e. the Part a scrap rate)? (Round your answer to the nearest whole number. Omit the \"$\" sign in your response.)

Solution

a) lets say we start with x units.

1st step: Scrap = 0.1x Quality units = 0.9x

2nd step: Scrap = 0.9x * 0.06 = 0.054x

Quality units = 0.9x - 0.054x = 0.846x

3rd Step: Scrap = 0.846x * 0.06 = 0.051x

Quality units = 0.846x - 0.051x = 0.795x

So after 3 process steps with mentioned scrap rate the quality units are 0.795x

Hence for 450 desired units 0.795x = 450 --> x= 566 units

so 566 units must be start with to get the desired output of 450 units daily.

b) If the scrap rate for each step could be cut in half, 62 units would this save in terms of the scrap allowance

C) If the scrap represents a cost of $10 per unit, it is costing the company $1,160 per day for the original scrap rate