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A manager must decide how many machines of a certain type to purchase. Each machine can process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per customer, and revenue will be $45 per customer.

a. Determine the break-even point for each range.

b. If estimated demand is 90 to 120 customers per day, how many machines should be purchased?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M985083

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