Reference no: EM13661173

A manager must decide which type of machine to buy, A, B or C. Machine costs are as follows: Machine Cost A $40,000 B $30,000 C $80,000 Product forecasts and processing times on machines are as follows: Processing Time Per Unit (Minutes) Product Annual Demand A B C 1 16,000 3 4 2 2 12,000 4 4 3 3 6,000 5 6 4 4 30,000 2 2 1 Question 1: Assume that only purchasing cost are being considered Which Machine would have the lowest total cost, and how many of that machine would be needed? Machines operate 10 hours a day, 250 days a year Question 2: Consider this additional information: The machines differ in terms of hourly operating costs: The A Machines have an hourly operating cost of $10 each, B Machines have an hourly operating cost of $11 each, and C machines have an hourly operating cost of $12 each. Which alternative would be selected, and how many machines, in order to minimize total cost while satisfying capacity processing requirements?