A plastic manufacturing company that makes four major products seeks to expand its operations in the coming year. At the beginning of the financial year, the company must decide on which of four new machines A, B, or C to purchase to be able to meet total annual demand. Each machine operates 14 hours a day, 360 days a year. Machine A costs GH¢43,000, machine B costs GH¢37,500 and machine C costs GH¢75,000. The following product forecasts and processing times have been projected: Demand, units/year Processing times per Unit (Minutes) Product Machine A Machine B Machine C Penholders 16,000 5 3 6 Bowls 14,000 4 3 5 Cups 6,000 6 5 7 Carrier Bags 24,000 3 2 3 Plastic Bottles 20,000 4 5 3 a. Calculate the pure load on each of the machines. b. Assuming that only purchasing costs are being considered, which of the machines would have the lowest cost for the manufacturer’s total processing needs? c. How much will the manager have to pay for the purchase of the machine in question (d) in order to be able to meet all of the demand for the year?
A plastic manufacturing company that makes four major products seeks to expand its operations
in the coming year. At the beginning of the financial year, the company must decide on which of
four new machines A, B, or C to purchase to be able to meet total annual demand. Each machine
operates 14 hours a day, 360 days a year. Machine A costs GH¢43,000, machine B costs
GH¢37,500 and machine C costs GH¢75,000. The following product
Demand,
units/year Processing times per Unit (Minutes)
Product Machine A Machine B Machine C
Penholders 16,000 5 3 6
Bowls 14,000 4 3 5
Cups 6,000 6 5 7
Carrier Bags 24,000 3 2 3
Plastic Bottles 20,000 4 5 3
a. Calculate the pure load on each of the machines.
b. Assuming that only purchasing costs are being considered, which of the
machines would have the lowest cost for the manufacturer’s total processing
needs?
c. How much will the manager have to pay for the purchase of the machine in
question (d) in order to be able to meet all of the demand for the year?
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