A plastic manufacturing company that makes four major products seeks to expand its operations

in the coming year. At the beginning of the financial year, the company must decide on which of

four new machines A, B, or C to purchase to be able to meet total annual demand. Each machine

operates 14 hours a day, 360 days a year. Machine A costs GH43,000, machine B costs

GH37,500 and machine C costs GH75,000. The following product forecasts and processing times have been projected:

Demand,

units/yearProcessing times per Unit (Minutes)

ProductMachine AMachine BMachine C

Penholders16,000536

Bowls14,000435

Cups6,000657

Carrier Bags24,000323

Plastic Bottles20,000453

a. Calculate the pure load on each of the machines.

b. Which of the machines is a Capacity Constrained Resource?

c. How many of each machine would be needed to meet all of the year's demand?

d. Assuming that only purchasing costs are being considered, which of the

machines would have the lowest cost for the manufacturer's total processing

needs?

e. How much will the manager have to pay for the purchase of the machine in

question (d) in order to be able to meet all of the demand for the year?