Table 43
the North Bend Manufacturing Company Is Producing Two Types

Multiple Choice

Table 4.3
The North Bend Manufacturing Company is producing two types of products, A and B. Demand forecasts for next year and other production-related information are provided in the following table:
$$\begin{array} { l | c | c } & \text { Product A } & \text { Product B } \\\hline \text { Demand forecast (units/yr) } & 4,000 & 12,000 \\\text { Batch size (units/batch) } & 80 & 150 \\\text { Standard processing time (hr/unit) } & 2.5 & 2 \\\text { Standard setup time (hr/batch } & 18 & 24\end{array}$$
Both products A and B are produced at the same operation called MASAC27A.
-Use the information in Table 4.3 to help answer this question.Currently,the company has 12 MASAC27A machines,and financial constraints prevent any expansion for the next year.Which one of the following alternatives will allow next year's demand to be fully covered?

A) Do nothing.
B) Increase the capacity cushion to 30 percent.
C) Increase the batch size of product B to 300 units.
D) Decrease the capacity cushion by 1 percent.