Problem 5-9 A company manufactures a product using machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 222 units per day. Annual demand is currently 60,000 units. It is forecasted that within two years, annual demand will triple. How many cells should the company plan to acquire to satisfy predicted demand under these conditions? Assume that no cells currently exist. Assume 245 workdays per year. (Round up your answer to the next whole number.) Cells

Present Actual output = 200 units per cell

Output after improvement = 222 units per cell

No of working days = 245 days per year

Actual demand = 60000 units

Projected annual demand = 60,000 * 3 = 1, 80,000

Annual capacity per cell = 222 * 245 Working days = 54390

Annual capacity per cell = 54,948

No of cells needed = 1, 80,000/ 54390 = 3.31

Cells = 4

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