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Working overtime or reducing capacity cushion

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Reference no: EM132320748

Up, Up, and Away is a producer of kites and windsocks. Relevant data on a bottleneck operation in the shop for the upcoming fiscal year are given in the following table:

ITEM KITES WINDSOCKS

Demand forecast 30,000 units/year 12,000 units/year

Lot size 20 units 70 units

Standard processing time 0.3 hour/unit 1.0 hour/unit

Standard setup time 3.0 hours/lot 4.0 hours/lot

The shop works two shifts per day, eight hours per shift, 200 days per year. There currently are four machines, and a 25% capacity cushion is desired. How many machines should be purchased to meet the upcoming year's demand without resorting to any short-term capacity solutions (e.g., working overtime or reducing capacity cushion?)

Reference no: EM132320748

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