n=48 Problem III. Capacity Measures A chocolate packaging machine is designed to

Question

n=48

Problem III. Capacity Measures A chocolate packaging machine is designed to dispense 400 boxes of chocolate per hour. Given the time consuming factors such as maintenance, materials shortage, work break, etc., the machine can effectively produce 350 boxes per hour. Due to the recent lower than expected market demand, however, the actual output has been limited to 250+ n boxes per hour Example: Actual Output = 250 + n = 250 + 45 = 295 boxes Use your n (the summation of all digits of your ID number) to answer the following questions: Round your non-integer answers to four decimal places A. What is the efficiency this machine? B. What is the utilization this machine?

Explanation / Answer

Efficiency of machine= units can produce/ units designed to produce = 350/400 = 0.875

Utilization of machine= actual output/ units designed to produce= (250+ 48)/ 400= 0.745

Assuming n= 45, and no. of total doors to be manufactured per month= 100 (since these data is not give in the question)

Break even units= fixed expenses/ contribution margin per unit= 6000/ (sales- variable expenses)/ total door units= 6000/ [{(300-45)-(80+45)*}100/100]= 46.15 units each month, approx 47 units

When installing 40 doors per month=

Profit or loss= Profit = Unit Contribution Margin × units – Fixed expenses = [{(300-45)-(80+45)*}100/100] * 40 – Fixed expenses = 5200- 6000= -800

Hence a loss of $800

For a profit of $5000,

5000= Unit Contribution Margin × units – Fixed expenses

5000= [{(300-45)-(80+45)*}100/100] * N- 6000

5000= 130 * N – 6000

11000/130 = N = 84.61 units approx to 85 units

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