A company manufactures a product using two machine cells. Each cell has a design

Question

A company manufactures a product using two machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 225 units per day. Annual demand is currently 50,000 units. It is forecasted that within two years, annual demand will triple. How many cells should the company plan to acquire to satisfy predicted demand under these conditions? Assume 240 workdays per year. (Round your answer to the next whole number.) Cells

Explanation / Answer

Machine cells problem:

Present annual demand = 50,000

Forecast of annual demand is three times = 1,50,000

Actual output will be 225 per day per cell

250 work days per year is utilized

Annual capacity per cell = 225 units per day * 250 days per year = 56,250

Hence the number of cells = Forecast of annual demand/Annual capacity per cell

= 1,50,000/56,250 = 2.666 (roughly we can assume it as 3 cells)

Felt-flip pen problem:

a) Fixed cost = 25,000

variable cost = 40 cents = $ 0.4

price = $ 2

break even quantity = fixed cost / (price - variable cost per unit)

= 25,000/(2-0.4) = 25,000/1.6 = 15,625

b). here it says the forecast materializes hence the

number of units = 31,000

fixed cost = 25,000

variable cost = 40 cents = $ 0.4

total variable cost = number of units * variable cost = 12,400

total costs = fixed cost + total variable cost = 37,400

intended profit = 23,000

intended profit = total income - total costs

total income = (price per unit * total units)

23,000 = (price per unit * total units) - total costs

substitute the value;

we get the price per unit = $ 1.9438

Real estate problem :

cost of A = monthly charge + per minute charge for day time * total minutes of day time + per minute charge for evening time * total minutes of evening time

= 20+ (140 * 0.43) + (60* 0.18) = 91

cost of B = monthly charge + per minute charge for day time * total minutes of day time + per minute charge for evening time * total minutes of evening time

= 20+ (140 * 0.53) + (60* 0.15)

= 103.2

cost of C = monthly charge + flat rate till 250 minutes + (any extra minutes * rate per minute)

here the total time is only 200 minutes

hence the cost of C = 20 + 80 = 100

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