Chapter $5,$ Problem $11$

A manager must decide which type of machine to buy, A$,$ B$,$ or C$.$ Machine costs are as follows:

Machine Cost

A $$40,000$

B $$30,000$

C $$80,000$

Product forecasts and processing times on the machines are as follows:

Processing Time per Unit $($minutes$)$

Product

Annual

Demand

A B C

$116,000342$

$212,000443$

$36,000564$

$430,000221$

Assume that machines operate $10$ hours a day, $250$ days a year. If we only consider purchasing costs, which machine would have the lowest total cost?

A

B

C

All of them are the same