Chapter $5$ Question $11$ Page $219$

A manager must decide which type of machine to buy A$,$ B$,$ or C

Machine costs

Machine Cost

A $$40,000$

B

$$30,000$

C $$80,000$

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

Product Annual Demand Processing times per unit $($minutes$)$

A B C

$116\mathrm{.}000342$

$212,000443$

$36,000564$

$430,000221$

a$.$ Assume that only purchasing costs are being considered and machines operate $10$ hours a day $250$ days per year;

a$1.$ Which machine would have the lowest total costs?

a$2.$ How many of that machine would be needed

$49$

b$.$ Consider this additional information: the machines differ in terms of hourly operating costs; The A machines have an hourly operating cost of $$10$ each, B machines have an hourly operating cost of $$11$ each, and C machines have an hourly operating cost of $$12$ each. Which alternative would

b$1.$ Which machine would have the lowest total costs?

b$2.$ How many of that machine would be needed