2-38. For the production of part R-193, two operations are being considered. The capital investment associated with
Question:
2-38. For the production of part R-193, two operations are being considered. The capital investment associated with each operation is identical. Operation 1 produces 2,000 parts per hour. After each hour, the tooling must be adjusted by the machine operator. This adjustment takes 20 minutes. The machine operator for Operation 1 is paid $20 per hour (this includes fringe benefits). Operation 2 produces 1,750 parts per hour, but the tooling needs to be adjusted by the operator only once every two hours. This adjustment takes 30 minutes. The machine operator for Operation 2 is paid $11 per hour (this includes fringe benefits). Assume an 8-hour workday. Further assume that all parts produced can be sold for $0.40 each. Should Operation 1 or Operation 2 be recommended? What is the basic trade-off in this problem? (2.4)
Step by Step Answer:
Engineering Economy
ISBN: 9780134870069
17th Edition
Authors: William Sullivan, Elin Wicks, C Koelling