A company manufactures a product using two identical machines. Each machine has

Question

A company manufactures a product using two identical machines. Each machine has a design capacity of 265 units per day and an effective capacity of 236 units per day. At present, actual output averages 197 units per machine, but the manager estimates that productivity improvements soon will increase output to 228 units per day. Annual demand for the product is currently 50,000 units, but it is expected that within two years annual demand will double.

How many machines should the company plan to have to satisfy the forecasted demand? Assume 240 workdays per year. (Round the final answer to the next whole number.)

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A company manufactures a product using two identical machines. Each machine has a design capacity of 265 units per day and an effective capacity of 236 units per day. At present, actual output averages 197 units per machine, but the manager estimates that productivity improvements soon will increase output to 228 units per day. Annual demand for the product is currently 50,000 units, but it is expected that within two years annual demand will double.

Explanation / Answer

Current demand of the product = 50,000 units

Since annual demand is expected to double within 2 years , forecasted demand = 50,000 x 2 = 100,000 units

Forecasted output per machine per day = 228 units

Forecasted demand per machine = 228 units/ day x 240 workdays = 54720

Number of machines company plan to have

= forecasted annual demand / Forecasted demand per machine

= 100,000 / 54720

= 1.827 ( 2 rounded to nearest whole number )

NUMBER OF MACHINES = 2

NUMBER OF MACHINES = 2

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