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1 0 . What are some major capacity considerations in a hospital? How do they differ from those of a car manufacturing factory? 1 1

10. What are some major capacity considerations in a hospital? How do they differ from those of a car manufacturing factory?
11. A factory has a maximum capacity of 5,000 units per day using overtime and skipping the daily maintenance routine. At 4,000 units per day, the factory operates at a level where the average cost per unit is minimized. Currently, the operation runs at a level of 3,500 units per day. What is the capacity utilization rate?
12. In considering a capacity expansion at a battery company, we have two alternatives:
1. The first alternative is expected to cost $1,000,000 and has an expected profit of $500,000 per year over the next three years.
2. The second alternative is expected to cost $800,000 and has an expected profit of $450,000 per year over the next three years.
Currently, the interest rate is 10%, and at that rate, the present value of $1 in the following three years is: 0.909,0.826, and 0.751, respectively. Which alternative should we select, and what is the expected value of the expansion.
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