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 $40000 B $60000 C $50000 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	3	3	3
2	16000	6	3	6
3	6000	3	4	3
4	3000	2	4	2

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 = 192000 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 $12, $12, and $17 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 =233600 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)