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1. An assembly line must produce 480 units every 8-hour workday. There are 10 tasks to complete, with the sum of the task times equal to 4 minutes. If this work is assigned across five workstations, what would the efficiency of the balance be?

2. A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 1,000 units of output each month. However, it has a maximum output capability of 1,250 units per month, and can produce as little as 500 units per month without corporate headquarters shifting production to another plant. If the factory produces 925 units in October, what is the capacity utilization rate in October for this factory?

Use the following demand data (1,000s) for the next two questions:

1 2 3 4
Product A 500 550 600 650
Product B 200 225 275 300

Currently there are three identical processing machines for producing these products. Each machine can produce 300,000 of product A or 200,000 of product B per year, or some combination of both.

1. What percent of machine capacity is used in year 1?

2. In which year will demand first exceed capacity?

A company produces an item with D = 5000, H = $20, S = 500, and C=100. They have correctly figured their optimal order quantity Q = 500. The supplier has offered a $200 discount per order if the company orders 1000 at a time. What would be the total annual cost if the company accepts this offer and changes Q to 1000? (Be sure to figure the total annual discount correctly.)