A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:Machine CostA $40,000B $30,000C $80,000Product forecasts and processing times on the machines are as follows: Processing Time per Unit (minutes)ProductAnnual DemandABC11600034221200044336000564430000221a.) Assume that machines operate 10 hours a day, 250 days a year. If we only consider purchasing costs, which machine would have the lowest total cost?b.) Assume machines operate 10 hours a day, 250 days a year. If we select machine A, how many machine A do we need? (Use common sense to decide the answer.)

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Answered: A manager must decide which type of…

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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A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:

Machine Cost
A $40,000
B $30,000
C $80,000
Product forecasts and processing times on the machines are as follows:

		Processing Time per Unit (minutes)
Product	Annual Demand	A	B	C
1	16000	3	4	2
2	12000	4	4	3
3	6000	5	6	4
4	30000	2	2	1

a.) Assume that machines operate 10 hours a day, 250 days a year. If we only consider purchasing costs, which machine would have the lowest total cost?

b.) Assume machines operate 10 hours a day, 250 days a year. If we select machine A, how many machine A do we need? (Use common sense to decide the answer.)

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