Question: A machine needs to be immediately replaced in a certain manufacturing facility, as the machine downtime costs are $ 2 , 0 0 0 per
A machine needs to be immediately replaced in a certain manufacturing facility, as the machine downtime costs are $ per hour. The supply manager looking to purchase a machine was evaluating two alternatives. Machine A Machine B Cost $ $ Delivery time days days Downtime costs $ hour $ hour a Calculate the lost revenue based on the delivery time difference and downtime costs, considering the machines will run hours a day and days a week. b Based on your results, what is the best alternative and why? Explain quantitatively. c Consider now a different scenario. You have acquired Machine B Your demand forecast has been stable until your sale price suddenly increased from $ to $ per day. i Considering you have acquired machine B what would be the daily lost revenue in sales during a day period? ii Considering lost sales in a day period against lost revenues based on the delivery time question a would you still have acquired machine B Why?
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