Question 2 options:

Remember Do Not format your answers . No $ signs or commas A manager must decide which type of machine to buy, either A, B or C. Machine costs are as follows: Machine A $50000 B $70000 C $40000 Each machine will be used to produce 4 different Products. The forecasted demand and processing times on the machines are as follows:

Processing Time Per Unit (Minutes)

Product	Annual Demand	Using Machine A	Using Machine B	Using Machine C
1	24000	4	4	4
2	16000	6	4	6
3	9000	2	1	5
4	3000	4	4

Machines operate 10 hours per day, 250 days per year. Compute the yearly processing time (in minutes) required for each of the different machines. Machine A Processing Time = 222000 Machine B Processing Time = Machine C Processing Time = Assume that only purchasing costs are being considered. The machine with the lowest total cost = (either A, B, or C)

How many of that machine would be needed?

The machines differ in terms of hourly operating costs. Machine A, B, and C have hourly operating costs of $10, $15, and $13 respectively. Annual Operating Cost for Machine A = Annual Operating Cost for Machine B = Annual Operating Cost for Machine C =

Assume that each of the machines has a useful life of 4 years and the annual demand will remain at the same level for each of the 4 years. Total Cost would be the initial cost of the machine(s) plus 4 years of operating costs. Total Cost for Machine A =248000 Total Cost for Machine B = Total Cost for Machine C = The machine Alternative with the lowest total cost (initial cost plus 4 years of operating costs) =

(either A, B, or C)