Question: Please solve both a and b 1. a) Product A and B will be produced in a manufacturing company with the annual production rate of
Please solve both a and b
1. a) Product A and B will be produced in a manufacturing company with the annual production rate of 80,000 units for Product A and 65,000 for Product B. Production sequence for both products is the same: Drilling Turning Milling. Machine availability for all departments is 90%, with the remaining time being required for maintenance and repair work. One daily setup of 0.20 hours will be required for each machine regardless of the type of operation. Given that this plant will work 250 workdays per year with a daily shift of 8 hours, it is desired to determine the number of machines required (if decimal is 0.09 round down otherwise round up). (40pt) Scrap rate is 2%. b) For part al assume that the service life of all the machines is 15 years and the salvage value is 10% of the purchase cost. Calculate annual cost of these machines using the straight-line technique and find the unit costs of the Product A and B based on annual costs of the equipment. The following table provides the initial cost and annual O\&M cost of each machine. (20pt)
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