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 - Cost: $100,000 Delivery Time: 50 days Downtime Costs: $2000/hour Machine B - Cost: $125,000 Delivery Time: 45 days Downtime Costs: $2000/hour a). Calculate the lost revenue based on delivery time difference and downtime costs, considering the machines will run 8 hours a day / 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, but just realized the production capacity of machine A is 10% higher. Your demand forecast has been stable, until your part sales have suddenly increased from $10,000 to $11,000 per day.

d). Considering you have acquired machine B, what would be the daily lost revenue in sales during a 15 days period?

e). Considering lost sales in a 15-day period against lost revenues based on delivery time (question a), would you still have acquired machine B? Why?