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 229 units per day. Annual demand is currently 70,000 units. It is forecasted that within two years, annual demand will triple. How many cells will the company require to satisfy predicted demand under these conditions? Assume 243 workdays per year."

Answer 1

Number of cells needed = 4

Step-by-step explanation:

The current output averages 200 units per cell, but the output will soon increase to 229 units per cell per day due to productivity improvements.

The current demand is 70000 units per year and it will triple in 2 years. Hence annual demand to be fulfilled is 70,000*3 = 210,000 units per year.

Assuming 243 workdays per year

Hence, Output per day * 243 = 210000

Output per day = 210000 / 243

Output per day = 864.20

As each cell will produce 229 units per day, number of cells needed will be 864.20 / 229

Hence, Number of cells needed = 4