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The manager of a car wash must decide whether to have one or two wash lines. One line will mean a fixed cost of $6,000 a month, and two lines will mean a fixed cost of $9,000 a month. Each line would be able to process 15 cars an hour. Variable costs will be $4 per car, and revenue will be $5.95 per car. The manager projects an average demand of between 14 and 18 cars an hour. Would you recommend one or two lines? The car wash is open 280 hours a month.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91764587

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