Table 4.2
High Tech, Inc. is producing two types of products: A and B. Both are produced at the same sawing operation. Because of demand uncertainties, the operations manager obtained three demand forecasts (pessimistic, expected, and optimistic). The demand forecasts, batch sizes (units/batch), processing times (hr/unit), and setup times (hr/batch) follow.

\begin{array}{c}\quad\quad\quad\quad\quad\text { Time Standard } \quad\quad \quad\quad\quad\quad\quad \text { Demand Forecasts ( 000 units/yr) }\\\begin{array}{|l|l|l|l|l|l|l|}\hline \text { Product } & \text { Processing } & \text { Setup } & \text { Batch Size } & \text { Pessimistic } & \text { Expected } & \text { Optimistic } \\\hline \text { A } & .20 & 2.0 & 40 & 200 & 240 & 300 \\\text { B } & .15 & 3.0 & 50 & 160 & 180 & 200 \\\hline\end{array}\end{array}

The sawing machines operate on two 8-hour shifts, 5 days per week, and 50 weeks per year. The manager wants to maintain a 10 percent capacity cushion.
-Using the information from Table 4.2,how many hours of capacity can the company expect from each of its sawing machines?
A) less than 3500 hours
B) more than 3500 hours but less than 3700 hours
C) more than 3700 hours but less than 3900 hours
D) more than 3900 hours

Which One of the Following Statements About Capacity Expansion Is

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