A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine. Cost A B с Product forecasts and processing times on the machines are as follows: $80,000 $70,000 $40,000 Annual Product Demand 1 25,000 22,000 20,000 9,000 2 3 4 PROCCESSING TIME PER UNIT (minutes) A B C A 5 3 3 5 B 4 1 1 6 Total processing time in minutes per machine: C 2 Click here for the Excel Data File 4 6 2 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 250 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number.)
A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine. Cost A B с Product forecasts and processing times on the machines are as follows: $80,000 $70,000 $40,000 Annual Product Demand 1 25,000 22,000 20,000 9,000 2 3 4 PROCCESSING TIME PER UNIT (minutes) A B C A 5 3 3 5 B 4 1 1 6 Total processing time in minutes per machine: C 2 Click here for the Excel Data File 4 6 2 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 250 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Transcribed Image Text:Problem 5-11 (Algo)
A manager must decide which type of machine to buy, A,
B, or C. Machine costs (per individual machine) are as
follows:
Machine
A
B
с
Cost
$80,000
$70,000
$40,000
Product forecasts and processing times on the machines
are as follows:
Annual
Product Demand.
1
2
3
4
25,000
22,000
20,000
9,000
A
B
с
PROCCESSING TIME PER
UNIT (minutes)
A
5
3
3
5
B
4
1
1
6
Total processing
time in minutes
per machine:
C
2
Click here for the Excel Data File
4
6
2
a. Assume that only purchasing costs are being
considered. Compute the total processing time required
for each machine type to meet demand, how many of each
machine type would be needed, and the resulting total
purchasing cost for each machine type. The machines will
operate 10 hours a day, 250 days a year. (Enter total
processing times as whole numbers. Round up machine
quantities to the next higher whole number. Compute
total purchasing costs using these rounded machine
quantities. Enter the resulting total purchasing cost as a
whole number.)
Transcribed Image Text:B
с
A
B
C
Buy
A
B
C
b. Consider this additional information: The machines
differ in terms of hourly operating costs: The A machines
have an hourly operating cost of $12 each, B machines
have an hourly operating cost of $13 each, and C
machines have an hourly operating cost of $12 each. What
would be the total cost associated with each machine
option, including both the initial purchasing cost and the
annual operating cost incurred to satisfy demand?(Use
rounded machine quantities from Part a. Do not round
any other intermediate calculations. Round your final
answers to the nearest whole number.)
Total cost for each machine
Number of each machine needed and
total purchasing cost
Buy
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