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Q2. In the following situation, should one machine be purchased and operated 24   hours a day,...

Q2. In the following situation, should one machine be purchased and operated 24   hours a day, or should three machines be bought and operated 8 hours?

  1. The machine cost $ 120000 with an economic life of 10 years.
  2. The 24 operation is really only 95% efficiency because of maintenance and repair activities.
  3. Labor is paid in full no matter how many hours they work in each shift.
  4. First shift operators get $ 12, second shift operators get $ 14, and third shift operators get $ 16.5 per hour.

With regular one-shift production, the company does not pay for lunch so it gets 8 hours’ work for 8 hours’ pay.

Since the plan is to work 6 days a week, what action would you take? Discuss your findings.

Business   Operations-Management   
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Answer #1

Answer:Action to be taken is to install 3 machines instead of 1 machine,Please find the attached explanation.

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