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11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost $40,000 $30,000 $80,000 ABC C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Annual Demand 16,000 12,000 6,000 30,000 A 3452 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 low- est 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 oper- ating 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 capacity processing requirements?

11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost $40,000 $30,000 $80,000 ABC C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Annual Demand 16,000 12,000 6,000 30,000 A 3452 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 low- est 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 oper- ating 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 capacity processing requirements?

Practical Management Science
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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11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine A B C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Cost $40,000 $30,000 $80,000 Annual Demand 16,000 12,000 6,000 30,000 A 3452 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 low- est 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 oper- ating 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 capacity processing requirements?
Transcribed Image Text:11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine A B C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product 1 2 3 4 Cost $40,000 $30,000 $80,000 Annual Demand 16,000 12,000 6,000 30,000 A 3452 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 low- est 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 oper- ating 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 capacity processing requirements?
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