A company manufactures a product using machine cells. Each cell has a design cap

Question

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 228 units per day. Annual demand is currently 80,000 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 241 workdays per year. (Round up your answer to the next whole number.)

Explanation / Answer

Total production rate required = 3 x 80,000 = 240,000 units per year

Daily production = 240,000 / 241 = 996 units per day

Each cell currently produces 200 units per day so the company needs 996 / 200 = 4.98 cells that is 5 cells (at current production level)

If productivity is increased to 228 units per day, then number of cells required

= 996 / 228 = 4.37 cells that is 5 cells

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