Question

Hickory Manufacturing Company forecasts the following demand for a product (in thousands of units) over the next five years: Used from book Currently the manufacturer has seven machines that operate on a two-shift (eight hours each) basis. Twenty days per year are available for scheduled maintenance of equipment with no process output. Assume there are 250 workdays in a year. Each manufactured good takes 30 minutes to produce. a. What is the capacity of the factory

Answer 1

Answer:

51,520 units

Explanation:

a. The computation of the capacity of the factory is shown below:

Capacity of the factory = (Number of workdays in a year - number of given days) × number of hours × number of shifts × number of machines × basis

= (250 days - 20 days) × 8 hours × 2 shifts × 7 × 2

= 51,520 units

We simply applied the above formula to determine the capacity of the factory

Answer 2

Answer:

Capacity = 12880 units

Explanation:

• Work days = 250 - 20 = 230
• Shifts / day = 2
• Hours / shift = 8
• Machines working each time = 7

Total production time = 230 (2) (8) (7) = 25760 hours

Time required per good = 30 minutes or 1/2 hour

So, Total capacity = 25760 x 1/2

= 12880 units