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

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 25 minutes to produce.

a. What is the effective capacity of the factory?

b. Given the five-year forecast, how much extra capacity is needed each year?

c. Does the firm need to buy more machines? If so, how many? When?

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