Example Problem A company's production facility, consisting of two identical machines, currently caters only to product A. The annual demand for the product is 4000 units. Management has now decided to introduce another product, B, which uses the same facilities as that of product A. Product B has an annual demand of 2000 units. In view of the uncertainties involved in producing two products, management desires to have an overall 10 percent capacity cushion. Given the following additional information, how many more machines are required? (Assume 8 hours/shift, 2 shifts/day, 250 days/year, and that no overtime is allowed). 1. Using the information above, what is the total number of hours required of the machines to meet the demand for product A (show your calculations)? a. 8000 hours b. 8320 hours c. 5600 hours d. 5760 hours 2. Using the information above, what is the total number of hours required of the milling machine to meet the demand for product B (show your calculations)? a. 8000 hours b. 8320 hours c. 5600 hours d. 5760 hours 3. Does the company have enough machine to satisfy the current demand and why? 4. How many additional machines are required (show your calculations)? a. No additional machines are necessary. b. One additional machine is necessary. c. Two additional machines are necessary. d. More than two additional machines are necessary