A company's production facility, consisting of two identical machines, currently caters only to product A. The annual demand for the product is 4000 units. Management has now decided to introduce another product, B, which uses the same facilities as that of product A. Product B has an annual demand of 2000 units. In view of the uncertainties involved in producing two products, management desires to have an overall 10 percent capacity cushion. Given the following additional information, how many more machines are required? (Assume 8 hours/shift, 2 shifts/day, 250 days/year, and that no overtime is allowed).
Product Processing Time Setup Time Batch Size
per unit in hours per batch in hours
A 2.0 8 100
B 2.8 16 200
Estimating time needed to meet the demand for Product A
D = number of units forecast per year =4000
p = processing time (in hours per unit)=2 hours
s=set up time=8 hours
Number of batches required=annual demand/batch size=4000/100=40
Total time required to meet the demand of ...
Solution describes the steps to calculate number of machines required to meet the annual demand.