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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![Chapter 5 question:
1. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:
Machine Cost
A
C
Product forecasts and processing times on the machines are as follows:
PROCESSING TIME PER UNIT
(minutes)
Product
$50,000
$40,000
$90,000
1
2
3
4
Annual
Demand
18,000
14,000
8,000
32,000
A
B
3452
4462
C
2
34
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19b2298c-1a5e-41ca-ae1a-21e95919cae3%2F8358e84a-8b67-40d9-af82-0852f517088d%2Fdag11t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Chapter 5 question:
1. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:
Machine Cost
A
C
Product forecasts and processing times on the machines are as follows:
PROCESSING TIME PER UNIT
(minutes)
Product
$50,000
$40,000
$90,000
1
2
3
4
Annual
Demand
18,000
14,000
8,000
32,000
A
B
3452
4462
C
2
34
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?
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