Chapter 5, Problem 11 A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows: Machine Cost A $40,000 B $30,000 C $80,000 Product forecasts and processing times on the machines are as follows:       Processing Time per Unit (minutes) Product Annual Demand A B C 1 16,000 3 4 2 2 12,000 4 4 3 3 6,000 5 6 4 4 30,000 2 2 1 Assume that machines operate 10 hours a day, 250 days a year. If we only consider purchasing costs, which machine would have the lowest total cost?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section5.3: Assignment Models
Problem 12P
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Chapter 5, Problem 11

A manager must decide which type of machine to buy, A, B, or C. Machine costs are as follows:

Machine Cost
A $40,000
B $30,000
C $80,000

Product forecasts and processing times on the machines are as follows:

 

    Processing Time per Unit (minutes)
Product

Annual

Demand

A B C
1 16,000 3 4 2
2 12,000 4 4 3
3 6,000 5 6 4
4 30,000 2 2 1

Assume that machines operate 10 hours a day, 250 days a year. If we only consider purchasing costs, which machine would have the lowest total cost? 

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