Kolkmeyer Manufacturing Company is considering adding two machines to its manufacturing operation. This addition will bring the number of machines to nine. The president of Kolkmeyer asked for a study of the need to add a second employee to the repair operation. The arrival rate is 0.06 machines per hour for each machine, and the service rate for each individual assigned to the repair operation is 0.5 machines per hour.Each employee is paid $25 per hour. Machine downtime is valued at $75 per hour. From an economic point of view, should one or two employees handle the machine repair operation? Explain. If required, round your answers to two decimal places.Cost of one employee system: $ fill in the blank 11Cost of two employees system: $ fill in the blank 12From an economic point of view, should handle the machine repair operation.

The activity that maintains mechanical assets working efficiently is known as machine repair.…

Answered: Kolkmeyer Manufacturing Company is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Kolkmeyer Manufacturing Company is considering adding two machines to its manufacturing operation. This addition will bring the number of machines to nine. The president of Kolkmeyer asked for a study of the need to add a second employee to the repair operation. The arrival rate is 0.06 machines per hour for each machine, and the service rate for each individual assigned to the repair operation is 0.5 machines per hour.

Each employee is paid $25 per hour. Machine downtime is valued at $75 per hour. From an economic point of view, should one or two employees handle the machine repair operation? Explain. If required, round your answers to two decimal places.

Cost of one employee system: $ fill in the blank 11

Cost of two employees system: $ fill in the blank 12

From an economic point of view,

should handle the machine repair operation.

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