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 $2,000 per hour. The supply manager looking to purchase a machine was evaluating two alternatives. Machine A Machine B Cost $100,000 $125,000 Delivery time 50 days 45 days Downtime costs $2,000/ hour $2,000/ hour a) Calculate the lost revenue based on the delivery time difference and downtime costs, considering the machines will run 8 hours a day and 7 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 $10,000 to $11,000 per day. i) Considering you have acquired machine B, what would be the daily lost revenue in sales during a 15-day period? ii) Considering lost sales in a 15-day period against lost revenues based on the delivery time (question a), would you still have acquired machine B? Why?

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