Table 6.2 High Tech,Inc.is Producing Two Types of Products: a and B.Both

question 110

Multiple Choice

Table 6.2
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. 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 6.2,if the operation currently has 18 machines and the manager is willing to expand capacity by 20 percent through short-term options,what is the capacity gap (in terms of number of machines) if you assume the optimistic demand forecasts?

• A)fewer than or equal to 10
• B)more than 10 but fewer than or equal to 12
• C)more than 12 but fewer than or equal to 14
• D)more than 14

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Definitions:

Landlord

An individual or entity that rents out real estate to tenants.

Deferred Revenue

Money received by a company for goods or services which have not yet been provided, recorded as a liability on the balance sheet until the services are rendered or goods are delivered.

Adjusting Entry

A journal entry made at the end of an accounting period to update the accounts and ensure they reflect all revenues earned and expenses incurred during the period.