Demand for product-what is the capacity of the factory

Assignment Help Financial Management

Reference no: EM131964897

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

Year 1 2 3 4 5

Forecast demand 54 57 61 63 66

The company outsources its manufacturing to Chip manufacturing. Chip has six machines that operate on a two-shift (8 hours each) basis. Fifteen days per year are available for scheduled maintenance of equipment with no process output. Assume there are 240 workdays in a year. Each manufactured good takes 22 minutes to produce.

a. What is the capacity of the factory?

b. At what capacity levels (percentage of normal capacity) would the firm be operating over the next five years based on the forecasted demand? (Hint: Compute the ratio of demand to capacity each year.)

c. Does the firm need to buy more machines? If so, how many? When? If not, justify.

Reference no: EM131964897

Questions Cloud

Ensure an acquisition strategy is implemented successfully : Why is acquisition a necessary part of the CRM strategy cycle? What steps should be taken to ensure an acquisition strategy is implemented successfully?

Identify the president executive powers : Discuss representation and its various aspects as it relates to Congress. Identify the president's executive powers and the powers shared with Congress.

Explain what information was relevant and why : Write a brief synthesis and summary of the two articles. How are the topics of the two articles related? What information was relevant and why?

Develop a classroom management plan : Think of the diverse needs of your students and how to create an environment that is safe and inviting.

Demand for product-what is the capacity of the factory : Amazon forecasts the following demand for a product (in thousands of units) over the next five years. What is the capacity of the factory?

Develop power presentation of the four articles : As a group, review at least four academically reviewed articles on Group Cohesiveness. Develop power presentation of the 4 articles.

Review of the current risk management plan : You are an information technology (IT) intern working for Health Inc. (Health Inc), a fictitious health services organization headquartered in New York City

What if rates suddenly fall by two percent instead : Bond J has a coupon rate of 7 percent and Bond K has a coupon rate of 13 percent. What if rates suddenly fall by 2 percent instead?

Discuss the international dimensions of a business : In what ways did the simulation approximate the international dimensions of a business and in what ways were there significant issues not included.

User Account

All Pages