Knott€™s Industries manufactures standard and super premium backyard swing sets. Currently it has four identical swing-set-making machines, which are operated 250 days per year and 8 hours each day. A capacity cushion of 20 percent is desired. The following information is also known:

a. Does Knott€™s have sufficient capacity to meet annual demand?
b. If Knott€™s was able to reduce the setup time for the Super Premium Model from 45 minutes to 30 minutes, would there be enough current capacity to produce 20,000 units of each type of swingset?

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Standard Model Super Premium Model Annual Demand Standard Processing Time Average Lot Size Standard Setup Time per Lo3in 20,000 7 min 50 10,000 20 min 30 45 min