Question

The Ace Manufacturing Company has orders for three similar products:

Product Order (Units)
A 2000
B 500
C 1200
Three machines are available for the manufacturing operations. All three machines can produce any of these products. If the company needs to meet the orders for all three products efficiently, which manufacturing strategy should they employ?

A) Dedicated manufacturing, one product per machine.
B) Batch manufacturing, producing all three products on all machines.
C) Mixed-model manufacturing, producing a mix of products on each machine.
D) Randomized manufacturing, producing products in a random order.

Answer 1

The Ace Manufacturing Company should opt for the mixed-model strategy to produce a mix of products on each machine, offering efficiency and flexibility, especially when machine costs are low. If machine costs are high, batch manufacturing might balance capital and labor to lower total costs.

Step-by-step explanation:

The Ace Manufacturing Company is considering different manufacturing strategies to fulfill orders for three products efficiently. With orders for Product A (2000 units), Product B (500 units), and Product C (1200 units), the company has to decide among dedicated, batch, mixed-model, or randomized manufacturing. The firm should choose a mixed-model manufacturing strategy, which allows for producing a mix of products on each machine. This method promotes efficiency and flexibility, and it's advantageous when dealing with diverse product demands.

Considering the context where the cost of machine hours has become cheaper, it would make sense for the company to rely more on machinery than labor. In such a scenario, traditional dedicated manufacturing can lead to underutilization of resources if demand fluctuates. On the other hand, if machine costs have increased, as mentioned, the firm might lean towards a strategy that balances capital and labor more effectively, possibly batch manufacturing, which could lower total costs by producing in batches. An increase in machine costs generally pushes firms toward less capital-intensive strategies.