Question
In: Operations Management
A manager must decide which type of machine to buy, A, B, or C. Machine costs...
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 | $ | 80,000 |
| B | $ | 70,000 |
| C | $ | 40,000 |
Product forecasts and processing times on the machines are as
follows:
| PROCCESSING TIME PER UNIT (minutes) | |||||
| Product | Annual Demand |
A | B | C | |
| 1 | 24,000 | 1 | 4 | 6 | |
| 2 | 8,000 | 1 | 3 | 5 | |
| 3 | 30,000 | 6 | 4 | 3 | |
| 4 | 18,000 | 6 | 5 | 1 | |
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, 240 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. Omit the "$"
sign.)
| Total processing time in minutes per machine: | |
| A | |
| B | |
| C | |
| Number of each machine needed and total purchasing cost | ||
| 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 $14 each, and C machines have an hourly
operating cost of $15 each. What would be the total cost associated
with each machine option, including both the initial purchasing
cost and the annual operating cost incurred to satisfy
demand?(Use rounded machine quantities from Part a. Do not
round any other intermediate calculations. Round your final answers
to the nearest whole number. Omit the "$" sign.)
| Total cost for each machine | |
| A | |
| B | |
| C | |
Solutions
Expert Solution
Below is the screenshot of the LP table -
Below is the screenshot of the formula applied -
Below is the screenshot of the solver -
Below is the screenshot of the result -
| Processing Time in Minutes | |
| Machine A | 32000 |
| Machine B | 0 |
| Machine C | 108000 |
| Number of Machines | Machine Cost | |
| Machine A | 1 | 80000 |
| Machine B | 0 | 0 |
| Machine C | 1 | 40000 |
| Processing Time in Minutes | Operation Cost | Machine Cost | Total Cost | |
| Machine A | 32000 | 6400 | 80000 | 86400 |
| Machine B | 0 | 0 | 0 | 0 |
| Machine C | 108000 | 27000 | 40000 | 67000 |
keosha answered 3 months agoRelated Solutions
A manager must decide which type of machine to buy, A, B, or C. Machine costs...
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 $ 60,000
B $ 50,000
C $ 60,000 Product forecasts and processing times on the
machines are as follows:
PROCCESSING TIME PER UNIT (minutes) Product Annual Demand
Product Annual Demand Processing time per unti (minutes)
A B C
1 25,000 1 1 5
2 14,000 1 6 3
3 20,000 1 3 4
4 6,000...
A manager must decide which type of machine to buy, A, B, or C. Machine costs...
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
$
40,000
B
$
30,000
C
$
80,000
Product forecasts and processing times on the machines are as
follows:
PROCCESSING TIME PER UNIT (minutes)
Product
Annual
Demand
A
B
C
1
10,000
3
1
1
2
11,000
5
5
4
3
9,000
5
2
4
4
13,000
1
3
5
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