Complete problems 6, 8, and 9 on p. 220.

Directions: Show all the calculations you performed in solving the problems. Your calculations should be organized and clearly labeled.

6) Hickory Manufacturing Company forecasts the following demand for a product (in thousands of units) over the next five years:

Year	1	2	3	4	5
Forecast demand	60	79	81	84	84

Currently the manufacturer has seven machines that operate on a two-shift (eight hours each) basis. Twenty days per year are available for scheduled maintenance of equipment with no process output. Assume there are 250 workdays in a year. Each manufactured good takes 30 minutes to produce.

a. What is the capacity of the factory?

b. At what capacity levels (percentage of normal capacity) would the firm be operating over the next five years based on the forecasted demand? (Hint: Compute the ratio of demand to capacity for each year.)

c. Does the firm need to buy more machines? If so, how many? When? If not, justify.

8) Worthington Hills grocery store has five regular checkout lines and one express line (12 items or less). Based on a sampling study, it takes 11 minutes on the average for a customer to go through the regular line and 4 minutes to go through the express line. The store is open from 9 a.m. to 9 p.m. daily.

a. What is the stores maximum capacity (customers processed per day)?

b. What is the stores capacity by day of the week if the five regular checkout lines operate according to the following schedule? (The express line is always open.)

Hours/Day	Mon	Tue	Wed	Thur	Fri	Sat	Sun
9-12 am	1	1	1	1	3	5	2
12-4 pm	2	2	2	2	3	5	4
4-6 pm	3*	3	3	3	5	3	2
6-9 pm	4	4	4	4	5	3	1

*A 3 means three regular checkout lines are open on Monday from 4 to 6 pm

9) Given the following data for Alberts fabricating production area:

Fixed costs for one shift	=	$60,000
Unit variable cost	=	$7
Selling price	=	$12
Number of machines	=	6
Number of working days in year	=	340
Processing time per unit	=	40 minutes

a. What is the annual capacity with a single eight-hour shift?

b. What is the capacity with two shifts?

c. What is the break-even volume with a single-shift operation?

d. What is the maximum revenue with a single shift?

e. What is the break-even volume with