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Question 1: In the following situation, should one machine be purchased and operated 24 hours a day, or should three machines be bought and operated 8 hours?
1- The machine cost $ 120000 with an economic life of 10 years.
2- The 24 operation is really only 95% efficiency because of maintenance and repair activities.
3- Labor is paid in full no matter how many hours they work in each shift.
4- First shift operators get $ 12, second shift operators get $ 14, and third shift operators get $ 16.5 per hour.
With regular one-shift production, the company does not pay for lunch so it gets 8 hours' work for 8 hours' pay. Since the plan is to work 6 days a week, what action would you take? Discuss your findings.
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