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3. A company must decide which type of machine to buy, and how many units of that type, given the following information:
| TYPE | COST |
| RED | $10,000 |
| BLUE | $14,000 |
Product demand and process times for the equipment are as follows
| Processing Time in Minutes | Processing Time in Minutes | ||
| PRODUCT | ANNUAL DEMAND | RED | BLUE |
| Shirt | 12,000 | 4 | 6 |
| Pants | 10,000 | 9 | 9 |
| Tie | 18,000 | 5 | 3 |
How many machines of each type would be required to handle demand if the machines will operate 8 hours a day, 250 days a year? Which machine has the lowest total cost?
(1) State the Formula for the Number of Required Machines.
(2) Calculate the processing time available (for the year) for Machine use. (measure in minutes)
(3) Calculate the processing time needed (to meet the year’s demand) for the Machine. (measure in minutes)
(4) Calculate the Number of Required Machines of each Type:
(5) Which machine has the lowest total cost? Explain.
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