Preferred number of machines on the capacity cushion

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Reference no: EM132218297

The milling machine at Merlotte’s Manufacturing was excessively loaded last year. The company operates a one 8 hour shift per day (and 5 days per week, and 50 weeks per year). The owner, Mark Merlotte, wants to have a capacity cushion of 20 percent. Two types of products are routed through the milling machine. The annual demand for product A is 4000 units and 3000 units for product B. The batch size for A is 20 units and 30 units for B. The standard processing time for A is 0.5 hours/unit and 0.8 for B. The standard setup time for product A is 2 hours and 8 hours for product B. How many new milling machines are needed if the owner does not resort to any short-term capacity options? Justify your answer and discuss the company’s alternatives in detail including the effects of the preferred number of machines on the capacity cushion.

Reference no: EM132218297

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