A manager must whether to buy machine A or B. Machine costs are as follows: A $62.000 each: B $150.000 each

Product forecast and processing times on the machines are as follows

Processing Time per unit (minutes)

Product	Annual Demand	A	B
1	6000	5	2
2	16000	7	3
3	10000	3	2

Assume that only purchasing costs are being considered. Which machine would have the lowest purchase cost and how many

of that machine would be need? Machines operate 8 hours a day 250 days per year.

The machines differ in hourly operation costs. The A machines have an hourly operating cost of $12 each and B machines have

an hourly operating cost of $30 each. What is the operating cost per year and which alternative should be selected to minimize

total cost (for the first year) while satisfying the processing requirements?