Question

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:

Product Annual Processing Time Per

                           Demand A B C

1 18,000 4 2 1

2 20,000 1 5 3

3 20,000 5 6 6

4 16,000 4 6 3


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, 230 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 $13 each, B machines have an hourly operating cost of $11 each, and C machines have an hourly operating cost of $12 each. What would be the total cost associated with each machine option, including both the initial purchasing cost and the annual operating cost incurred to satisfy demand? (Use rounded machine quantities from Part a. Do not round any other intermediate calculations. Round your final answers to the nearest whole number. Omit the “$” sign.)

Total cost for each machine

A

B

C

Homework Answers

Answer #1

Answer :

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A manager must decide how many machines of a certain type to buy. The machines will...
A manager must decide how many machines of a certain type to buy. The machines will be used to manufacture a new gear for which there is increased demand. The manager has narrowed the decision to two alternatives: buy one machine or buy two. If only one machine is purchased and demand is more than it can handle, a second machine can be purchased at a later time. However, the cost per machine would be lower if the two machines...
A manager is trying to decide whether to buy one machine or two. If only one...
A manager is trying to decide whether to buy one machine or two. If only one is purchased and demand proves to be excessive, the second machine - can be pur­chased later. Some sales will be lost, however, because the lead time for producing this type of machine is 6 months. In addition, the cost per machine will be lower if both are purchased at the same time. The probability of low demand is estimated to be 0.20. The after-tax...
The manager of a industrial plant is planning to buy a machine of either type A...
The manager of a industrial plant is planning to buy a machine of either type A or type B. For each day’s operation the number of repairs X, that the machine A needs is a poisson random variable with mean 0.96. The daily cost of operating A is CA = 160 + 40X2 . For machine B, let Y be the random variable indicating the number of daily repairs, which has mean 1.12, and the daily cost of operating B...
The manager of a canned food processing plant must decide between two different labeling machines. Machine...
The manager of a canned food processing plant must decide between two different labeling machines. Machine A will have a first cost of $42,000, an annual operating cost of $28,000, and a service life of 4 years. Machine B will cost $51,000 to buy and will have an annual operating cost of $17,000 during its 4-year life. At an interest rate of 10% per year, which should be selected on the basis of a annual worth analysis?
The manager in a canned food processing plant is trying to decide between two labeling machines....
The manager in a canned food processing plant is trying to decide between two labeling machines. Assume an interest rate of 6%. Use annual cash flow analysis to determine which machine should be chosen Machine A Machine B First cost $15,000 $25,000 Maintenance and operating costs 1,600 400 Annual benefit 8,000 13,000 Salvage value 3,000 6,000 Useful life, in years 6 10
A factory is considering purchasing a lathe machine for the production. Each machine will cost $80,000...
A factory is considering purchasing a lathe machine for the production. Each machine will cost $80,000 and have an operating and maintenance cost that of $20,000 each year. Assume the salvage value is $20,000 at the end of 6 years and the interest rate is 9%. What is the annual equivalent cost of owning and operating each machine? Select one: a. 35175 b. 25000 c. 44644 d. 55000 e. 40979 f. 31370
Each unit of a product can be made on either machine A or machine B. The...
Each unit of a product can be made on either machine A or machine B. The nature of the machines makes their cost functions differ. Machine A: 30+ (x^2) / 6 Machine​ B: C (y) =180 + (y ^3) / 9 Total cost is given by ​C(x,y)= C(x)+ C(y). How many units should be made on each machine in order to minimize total costs if x+y=14,520 units are​ required? The minimum total cost is achieved when ----------? units are produced...
You plan to operate the same type of machine for 12 years. Machine A lasts 4...
You plan to operate the same type of machine for 12 years. Machine A lasts 4 years and Machine B lasts 6 years. Machine A costs $11,000 and Machine B costs $15,000. The salvage value of Machine A is $3,000 and the salvage value of Machine B is $1,700. Annual operation and maintenance costs are $5,000 for Machine A and $3,900 for Machine B. Both machines can be purchased in the future at the same price as today, and their...
"You plan to operate the same type of machine for 12 years. Machine A lasts 4...
"You plan to operate the same type of machine for 12 years. Machine A lasts 4 years and Machine B lasts 6 years. Machine A costs $8,000 and Machine B costs $12,000. The salvage value of Machine A is $4,000 and the salvage value of Machine B is $2,000. Annual operation and maintenance costs are $3,000 for Machine A and $3,500 for Machine B. Both machines can be purchased in the future at the same price as today, and their...
An international textile company’s North America Division must decide which type of fabric cutting machines it...
An international textile company’s North America Division must decide which type of fabric cutting machines it will use–a straight knife or a round knife. The estimates are summarized below. Compare them on the basis of annual worths at i = 8%. Round Knife Straight Knife First Cost $-200,000 $-190,000 AOC, per Year $-38,000 $-38,000 Overhaul in Year 2 – $-14,000 Salvage Value $38,000 $17,000 Life 6 years 4 years The ( a. round knife) (b. straight knife) type of fabric...