Indifference point
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Delana Lighfoot is a production analyst at the Golden Kernel processing plant, which processes whole-kernel cut corn. Delana's current project is to evaluate different levels of automation for quality control inspection of corn kernels.
Option 1 is to assign a number of employees along the conveyor belt to inspect the corn kernels manually as they go by and pick out small and off-color kernels.
Option 2 involves using fewer employees who only check for off-color kernels and then running the corn over a screen that filters out the small kernels.
Option 3 is to purchase a state-of-the-art, fully automated machine that uses video cameras, a computer workstation, and small bursts of air. This new machine can automatically inspect individual kernels of corn for size and color as the conveyer belt moves the kernels in a single layer by the machine. Inferior kernels are removed by a precisely placed small burst of air as the kernels pass over a perforated air tube.
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Solution Summary
Excel file contains step and explain how to calculate indifference points at which total cost under 2 options will be equal.
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