Table 42
High Tech, Inc The Sawing Machines Operate on Two 8-Hour Shifts, 5 Days

question 67

Multiple Choice

Table 4.2
High Tech, Inc. is producing two types of products: A and B. Both are produced at the same sawing operation. Because of demand uncertainties, the operations manager obtained three demand forecasts (pessimistic, expected, and optimistic) . The demand forecasts, batch sizes (units/batch) , processing times (hr/unit) , and setup times (hr/batch) follow.

$\begin{array}{c}\quad\quad\quad\quad\quad\text { Time Standard } \quad\quad \quad\quad\quad\quad\quad \text { Demand Forecasts ( 000 units/yr) }\\\begin{array}{|l|l|l|l|l|l|l|}\hline \text { Product } & \text { Processing } & \text { Setup } & \text { Batch Size } & \text { Pessimistic } & \text { Expected } & \text { Optimistic } \\\hline \text { A } & .20 & 2.0 & 40 & 200 & 240 & 300 \\\text { B } & .15 & 3.0 & 50 & 160 & 180 & 200 \\\hline\end{array}\end{array}$
The sawing machines operate on two 8-hour shifts, 5 days per week, and 50 weeks per year. The manager wants to maintain a 10 percent capacity cushion.
-Using the information from Table 4.2,what is the minimum total number of hours required of sawing equipment for the next year?

• A) less than 85,000 hours
• B) more than 85,000 but less than 95,000
• C) more than 95,000 but less than 105,000
• D) more than 105,000 hours

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Definitions:

Liquidation Payment

The payout received by investors or creditors during the liquidation of a company, prioritizing payments according to seniority of claims.

Preferred Stock

represents ownership in a corporation with a claim on assets and earnings before common stockholders, often paying fixed dividends.

Par Value

The nominal value of a bond or stock as declared by the issuer, which might not match its value on the market.

Annual Dividend

The annual dividend is the total amount of dividend payments a company distributes to its shareholders over a year.