What is the productivity of each machine

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Reference no: EM132212101

As the equipment manager of a bottle cap manufacturer, Carla needs to decide on purchasing a new plastic injection molding machine. Machine option 1 she is considering costs $20,000 for including installation. In addition, the maintenance cost is estimated to be $250 per month. The lifetime of the machine 1 is 5 years. It can produce 30,000 bottle caps per month. Machine option 2 costs $24,000 including installation, but the lifetime is expected to be 6 years. The monthly maintenance cost for machine 2 will be $300 per month. It can produce 35,000 bottle caps per month. a) What is the productivity of each machine? (hint: use bottle caps per dollar as the productivity unit) b) Which machine should be selected based on the productivity? Provide analytical reasoning.

Reference no: EM132212101

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