A (not-so-well maintained machine) machine is down roughly 40% of the time. One operator is assigned to service four identical such machines. Each machine can produce 60 widgets/hr if running (i.e. not completely idle). The operator is paid $10.00/hr and each machine costs $20.00/hr for power and supplies.
a) What is the actual production for the four machines supervised by one operator for an 8hour shift given the above conditions?
b) What is the unit cost for each widget?
c) Since there is so much lost production due to idle time, management is considering hiring another worker to assist the first operator in servicing these four machines.
There are two approaches or choices:
Assign machines #1 and #2 to the first operator and machines #3 and #4 to the second operator Or have both operators help each other and service all four machines as needed Which choice is best, i.e. lowest unit cost?