A manager must decide which type of machine to buy, A, B, or C. Machine costs (p

Question

A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows Machine $ 50,000 $40,000 $70,000 Product forecasts and processing times on the machines are as follows PROCCESSING TIME PER UNIT (minutes) Annual Product Demand 14,000 19,000 12,000 4 7,000 2 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 210 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number. Omit the "$" sign.) Total processing time in minutes per machine

Explanation / Answer

Total processing time of machine A = 14000x5+19000x1+12000x1+ 7000x2 =115000 min.

Total procesing time for machine B = 14000x3+19000x1+12000x3+7000x6 = 139000 min.

Total processing time for machine C = 14000x1 +19000x3+12000x4 +7000x1 = 126000 min.

b.

Total machine A needed = 115000/2100x60 = 1

Total machine B needed = 139000/126000 =1.1 =2

Total machien C needed = 126000/126000 =1

Cost of purchase of A = 50000

Cost of purchase of B = 2x40000 =80000

Cost of purchase of C = 70000

c. Annual operating cost of A = 13 x 1917 = 24921, Total cost = 50000+24921 = 74921

Annual operating cost of B = 15x2317 =34755, Total cost =34755+80000 = 114755

Annual operating cost of C = 10x2100 = 21000, Total cost = 21000+70000 = 91000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.