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A manager must decide between two machines. The manager will take into account each machine’s operating costs and initial costs, and its breakdown and repair times. Machine A has a projected average operating time of 138 hours and a projected average repair time of 5 hours. Projected times for machine B are an average operating time of 68 hours and a repair time of 4 hours. What are the projected availabilities of each machine? (Round your answers to 3 decimal places.)
Availability
Machine A ____
Machine B ____
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Assuming stock out costs for lost sales of $ 100 per unit, inventory carrying costs of $25 per unit per month and zero beginning and ending inventory, evaluate these two plans on an incremental basis:
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