A novelty coffee mug manufacturer produces 5 different designs that are sold at tourist information kiosks. The demand requirements for the coming tourist season is as follows:

The mugs can all be produced in the same workstations, but require different processing and setup times. The production information is in the following table:

The company wants to produce all the required mugs in one four-week period. It currently operates workstations that work 8 hours per day, 5 days per week, with a capacity cushion of 20%.

(a) Calculate the total time required to produce the mugs to meet the expected demand.

(b) Calculate the time available (taking into account the capacity cushion) for 1 workstation.

(c) How many workstations are needed to meet the production requirements?

(d) The company only has 4 workstations available. If it only operates its 4 stations, how many weeks does it need to meet the production requirements?

(e) The company has other contracts it needs to satisfy. Working on the mugs more than 4 weeks means it will have to cancel another contract, incurring a penalty of $4,500. Each new workstation costs the company $2,500. What should the company do: cancel the contract or buy the required workstations?

Design A B C D E Demand (units) 500 750 600 800 450 50 50 Design A B D E Batch Size (units) 50 50 50 Setup Time (hr/batch) 2 2 2.5 4 1.5 Processing Time (hr/unit) 0.15 0.15 0.25 0.25 0.10