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 223 units per day. Annual demand is currently 60,000 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 236 workdays per year

Answer 1

Answer:

The company should  plan to acquire to satisfy predicted demand under these conditions is 4 cells

Explanation:

The computation of the cells is shown below:

= (Two years annual demand ÷ output)

where,

Two years annual demand = annual demand × triple

                                             = 60,000 units × 3

                                             = 180,000 units

And, the output equals to

= Increase output × number of workdays per year

= 223 units × 236 workdays

= 52,628

Now put these values to the above formula  

So, the value would equal to

= 180,000 ÷ 52,628

= 3.42 approx