value: 5.00 points Problem 5-9 A company manufactures a product using machine ce
ID: 3048013 • Letter: V
Question
value: 5.00 points Problem 5-9 A company manufactures a product using machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 227 units per day. Annual demand is currently 70,000 units. It is forecasted that within two years, annual demand will triple. How many cells should the company plan to acquire to satisfy predicted demand under these conditions? Assume that no cells currently exist. Assume 245 workdays per year. (Round up your answer to the next whole number.) CellsExplanation / Answer
Annual Demand = 70,000 units
No of working days = 245
Design capacity = 250 units
Therefor annual capacity would be = 250 * 245
= 61,250 units
Current capacity = 230 units
No of working days = 245
Therefore annual production with current capacity = 245 * 230
= 56350 units
To meet the current demand the no of units needs to be manufactured.
If demand triples, then demand = 70,000 * 3
= 2,10,000 units
To meet the demand of 2,10,000 units the company needs to produce no of cells with improved productivity of 227 units:
= 2,10,000 / 227 * 245
= 2,10,000 / 55,615
= 3.8
Rounding off we get 4 cells to meet the demand.
Hence, Cells = 4
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