Question: Black bought an automatic machine from White to replace a machine that had previously required two employees to operate. In selling the machine to Black,

Black bought an automatic machine from White to replace a machine that had previously required two employees to operate. In selling the machine to Black, White pointed out the saving in the cost of the employees' time. White also stated that "Productive capacity will be doubled" with the new machine. Hourly production increased even more than double --1,100 pieces per hour against 500 pieces per hour previously. However, there was a problem involved. The machine seldom ran an hour without breaking down. Whenever it broke down, either one or two machine service personnel would be called upo n to fix it. After a month , one person was ordered to stand by for breakdown whenever the machine was scheduled to run. Weekly production on the automatic machine is only slightly greater than previous weekly production on the hand-operated machine. Select the most correct statement.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!