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Product forecasts and processing times on the machines are as follows: PROCESSING TIME PER UNIT (minutes) Annual Product Demand A B 1 18,000 3 4
Product forecasts and processing times on the machines are as follows: PROCESSING TIME PER UNIT (minutes) Annual Product Demand A B 1 18,000 3 4 2 2 14,000 4 4 3 3 8,000 5 6 4 4 32,000 2 2 1 a. Assume that only purchasing costs are being considered. Which machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $10 each, B machines have an hourly operating cost of Sll cach, and C machines have an hourly operating cost of $12 cach. Page 218Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements
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