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  3. a plastic molding machine produces a product whose annual demand...

Question: a plastic molding machine produces a product whose annual demand...

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A plastic molding machine produces a product whose annual demand is in the millions.

The machine is automated and used full time just for the production of this product. The

molding cycle time = 45 sec. No tooling is required other than the mold, which cost

$100,000 and is expected to produce 1,000,000 moldings (products). The plastic molding

compound costs $1.20/lb. Each molding weighs 0.88 lb. The only labor required is for a

worker to periodically retrieve the moldings. Labor rate of the worker = $18.00/hr

including overhead. However, the worker also tends other machines and only spends 20%

of his time on this machine. Setup can be ignored because of the long production run. The

molding machine was purchased for $500,000 installed, its anticipated life = 10 years, and

it operates 6000 hours per year. Equipment overhead rate = 30%. Assume availability =

100% and scrap rate = 0. Determine (a) the hourly production rate of the machine, (b)

annual quantity of product molded, and (c) cost per piece.

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