Question: A work station is used to make two different components and then assembling them into the final product on the same work station. They can

A work station is used to make two different components and then assembling them into the final product on the same work station. They can make only one component at a time and need a setup change when switching from one component to the next. The work station costs $1200 per hour regardless of if it is used to make the component, the final assembly or it is being set up for production. Component 1 is made in batches of 100, needs a setup of 16 minutes, and a run time of 0.2 minute per unit. Component 2 is made in batches of 100 units, needs a setup of 11 minutes and a run time of 0.1 minute per unit. The final assembly process takes 1 minute to put the two components together. The current plan calls for set-up for component 1, produce component 1, setup for component 2, product component 2, assemble final product and then repeat the cycle. a) What is the average hourly output of product? (8 marks) b) What is the cost per unit of final product? (7 marks)

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