Chapter 5 question:

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

Machine Cost A $50,000 B $40,000 C $90,000 Product forecasts and processing times on the machines are as follows: PROCESSING TIME PER UNIT (minutes) Annual Product Demand A B C 18,000 3 4 2 2 14,000 4 4 3 3 8,000 5 6 4 4 32,000 2 2 1Assume that only purchasing costs are being considered. Which machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year. Consider this additional information: The machines differ in terms of hourly operating costs: The A machines have an hourly operating cost of 510 each, B machines have an hourly operating cost of 511 each, and C machines have an hourly operating cost of 512 each. Which alternative capacity processing requirements