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 228 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 produce to satisfy predicted demand under these conditions? Assume 241 workdays per year. (Round up your answer to the next whole number.)

Cells = ?

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 228 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 produce to satisfy predicted demand under these conditions? Assume 241 workdays per year. (Round up your answer to the next whole number.)

Explanation / Answer

expected demand = 3*50000 = 150000

no working days= 241

no of units to be produced per day = 150000/241 = 623

after productivity improvements, each cell would produce = 228

no of cells = 623/228 = 2.7 i.e 3cells are required, so company should produce 3 cells

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