Peru State College
BUS 335 PRODUCTION & OPERATIONS MANAGEMENT
Capacity Planning Case AKA Mini-Case #2
Due September 13th at 10 pm
Based on your great analysis and report from the last consulting assignment, your
new best friend at ZoomZoom Motorcycles has a new task for you!
The manager must decide which type of machine to buy, A, B, or C. (The machines
are labeled as such to avoid any bias from a brand name or any possibility for the
manager to connect who is sending him Kansas City Chiefs tickets in the mail)
Machine acquisition and non-wage related operating costs (largely cooling oil) are:
A = $ 58,000 acquisition, $ 1,950 monthly operating
B = $ 45,000 acquisition, $ 2,500 monthly operating
C = $ 95,000 acquisition, $ 5,200 monthly operating
Demand forecasts and processing times for each machine follow:
Processing Time
Annual Per Unit (in Minutes)
Product
Demand
A
B
C
1 16,000 4 3 4
2 14,000 2 4 2
3 6,500 5 5 1
4 29,000 3 2 1
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- Fall '07
- Griffin
- Management, Capacity utilization, PERU State College, monthly operating Demand, OPERATIONS MANAGEMENT Capacity, Annual Product Demand, Correct Capacity Utilization
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