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

Based on the information given the capacity of the factory is 51,250 units.

a. Capacity in units

First step is to calculate capacity in machine hours

Capacity in machine hours = Number of workdays × Number of shifts per day× Number hours per shifts × Number of machines

Let plug in the formula

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

Capacity in machine hours=230 days× 2 shifts × 8 hours × 7

Capacity in machine hours=25,760 machine hours

Second step is to calculate the capacity in units

Capacity in units=Capacity in machine hours×2 units per hour

Capacity in units=25,760 machine hours×2 units per hour

Capacity in units=51,520 units

b. Capacity level for the next five year

Year  Forecast demand × Capacity= Ratio

1          60,000/51,520=1.16

2         79,000/51,520=1.53

3          81,000/51,520=1.57

4          84,000/51,520=1.63

5          84,000/51,520=1.63

Learn more here:https://brainly.com/question/18523155