11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost A B $40,0

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11 A Manager Must Decide Which Type Of Machine To Buy A B Or C Machine Costs Are As Follows Machine Cost A B 40 0 1 (189.36 KiB) Viewed 89 times

11. A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost A B $40,000 $30,000 $80,000 C Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Annual Demand Product A B C 3 2 1 2 3 4 4 4 3 16,000 12,000 6,000 30,000 5 6 4 4 2 2 1 a. Assume that only purchasing costs are being considered. Which machine would have the low- est total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. b. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of $10 each, B machines have an hourly oper- ating cost of $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements?