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A company manufactures a single product which is processed by 3 machines in a continuous process. Machines X, Y and Z are used in the process. The current maximum output capacity per month from each machine is given below: –
Machine X
2,900 Units
Machine Y
2,600 Units
Machine Z
2,300 Units
The company has an option to purchase machine Z @ $2,000,000 which would increase its capacity by 700 units per month. It can also purchase both the machines, Y and Z in combined offer that will cost a total of $ 3,000,000. If the offer is ignored then machine Y will individually cost $ 1,500,000. Machine Y will increase the output capacity by 600 Units.
For producing and selling 1 more unit, $ 6,000 contribution is earned.
Advice the company what decision shall it take? Should it buy either of the two machines or both the machines or should not buy any new machine?
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Hello,
I hope you can assist, Please i would like to find out how to calculate the total number of hours needed for maximum prduction here:
Product A
Assembly(in minutes) 2
Quality Control (in minutes) 3
Packaging (in minutes) 4
Weekly Sales demand 1000 units
Product B
Assembly(in minutes) 3Quality Control (in minutes) 4
Packaging (in minutes) 2
Weekly Sales demand 1500 units
Product C
Assembly(in minutes) 2.5Quality Control (in minutes) 2
Packaging (in minutes) 3
Weekly Sales demand 850 units
Thanks
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