1. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost A B C $50,000 $40,000 $90,000 Product forecasts and processing times on the machines are as follows: PROCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Annual Demand 18,000 14,000 8,000 32,000 A 3 4 5 2 B 4 4 6 2 C 2 3 4 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 $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying 9uicapacity processing requirements?

1. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost A B C $50,000 $40,000 $90,000 Product forecasts and processing times on the machines are as follows: PROCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Annual Demand 18,000 14,000 8,000 32,000 A 3 4 5 2 B 4 4 6 2 C 2 3 4 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 $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying 9uicapacity processing requirements?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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