Problem 3. A company must decide which type of machine to buy, and how many units...

Transcribed Image Text:

Problem 3. A company must decide which type of machine to buy, and how many units of that type, given the following information. Type of Machine Cost per machine 1 2 $15,000 $22,000 Product demand and required processing times for the equipment are: Product Processing Time Required if Type 1 is used (minutes) A 56,000 B 108,000 C 95,000 Processing Time Required if Type 2 is used (minutes) 84,000 108,000 57,000 a. How many machines of each type would be required to handle demand if the machine will operate 8 hours a day, 250 days a year (keep 3 decimal places) b. If purchasing and operating costs are taken into account, which type of machines would minimize total costs, given your answer for part a? Operating costs are $18/hr for type 1 and $16/hr for type 2. Problem 3. A company must decide which type of machine to buy, and how many units of that type, given the following information. Type of Machine Cost per machine 1 2 $15,000 $22,000 Product demand and required processing times for the equipment are: Product Processing Time Required if Type 1 is used (minutes) A 56,000 B 108,000 C 95,000 Processing Time Required if Type 2 is used (minutes) 84,000 108,000 57,000 a. How many machines of each type would be required to handle demand if the machine will operate 8 hours a day, 250 days a year (keep 3 decimal places) b. If purchasing and operating costs are taken into account, which type of machines would minimize total costs, given your answer for part a? Operating costs are $18/hr for type 1 and $16/hr for type 2.