What is Yield Rate?
Regarding the NPV question in Group B, Student S asked us:
There is a footnote on page 3 of the case study - sorry if it's not clear. Yield rate is the number of sale quality items that the factory can produce. In this case, 90% - which means that it has to make 10% extra to achieve its target / meet demand.
Where the case means saleable (i.e. sale quality) units, it says so.
I have a question regarding coursework 2. What does a yield rate mean? Is it the minimum sale percentage at which the company is willing to gain? What happens if the sale was less than that, what does the company do?
There is a footnote on page 3 of the case study - sorry if it's not clear. Yield rate is the number of sale quality items that the factory can produce. In this case, 90% - which means that it has to make 10% extra to achieve its target / meet demand.
I wonder though, has this value been estimated by Don in his analysis on the number of units to be produced per annum? or does it mean that, for Graviton for example, the actual units to be produced per year should increase by 10%?
Where the case means saleable (i.e. sale quality) units, it says so.
posted by SuperJane at
10:18
1 Comments:
"Yield rate is the number of sale quality items that the factory can produce. In this case, 90% - which means that it has to make 10% extra to achieve its target / meet demand."
That seems a bit contradictory. Say I need to make 100 units. If 90% of what is output is saleable, then I would need to make 100/0.9 = ~111.11 units.
But if I make instead 10% extra I would end up with 110*0.9 = 99 saleable units.
Can you please clarify this for me? Is the yield rate not meant to directly apply in the way I have done? Thank you
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Anonymous, at 20/2/07 19:34
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