Baker Manufacturing Company forecasts the following demand for a product (in thousands of units) over the next five years.

 

Currently the manufacturer has eight machines that operate on a two-shift (eight hours each) basis. Twenty days per year are available for scheduled maintenance of equipment. Assume there are 250 workdays in a year. Each manufactured good takes 26 minutes to produce.

a. What is the effective capacity of the factory? 

b. Given the five-year forecast, how much extra capacity is needed each year?

c. Does the firm need to buy more machines? If so, how many? When?

Transcribed Image Text:

Year Forecast Demand 1 114 2 129 3 4 131 134 5 133