The Union Manufacturing Company Is Producing Two Types of Products

question 123

Essay

The Union Manufacturing Company is producing two types of products: A and B.The demand forecasts,batch size,and time standards for the Mark I operation follow:
$$\begin{array} { l | c | c } & \text { Product A } & \text { Product B } \\\hline \text { Demand forecast (units/yr) } & 1,000 & 4,000 \\\text { Batd size (units/bat d) } & 20 & 10 \\\text { Processing time (hr/unit) } & 3.2 & 4.5 \\\text { Setup time (hr/batch } & 10 & 20\end{array}$$
The company works 250 days per year and operates 2 shifts,each covering 8 hours.If a 20 percent capacity cushion is maintained,how many new Mark I machines are required if Union does not resort to any short-term capacity options?

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Definitions:

Inverse Demand Function

A mathematical model describing the relationship between the price of a good and the quantity demanded, typically showing how price can affect demand levels.

Monopolist

An individual or entity that is the sole supplier of a particular commodity or service, having significant control over its market.

Price Discrimination

The strategy of selling the same product or service at different prices to different customers, based on factors like willingness to pay, market segments, or purchase quantity.

Consumer's Age

A demographic factor affecting market preferences and purchasing behavior, reflecting different trends and needs based on age groups.