A Company Manufactures A Product Using Machine Cells

A company manufactures a product using machine cells. Each cell has a

A company manufactures a product using machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. Currently, the actual output per cell averages 200 units, with an estimated improvement to 220 units soon. The current annual demand is 50,000 units, and it is forecasted to triple within two years. The company plans to operate 245 workdays per year and has no existing cells.

Determine the number of machine cells the company should acquire to meet the future demand under these conditions.

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In designing production systems, companies must anticipate future demand to ensure capacity aligns with sales projections. This task involves assessing current capacities, estimating future requirements, and then planning for expansion accordingly. The scenario provided involves a company manufacturing a product with a single-cell manufacturing process, and the key is to determine how many additional machine cells are needed to satisfy tripled demand within two years, given recent and future productivity estimates.

Understanding the initial and projected capacities is essential. Each machine cell has a design capacity of 250 units per day, but operationally, it has an effective capacity of 230 units daily due to efficiency factors. Currently, each cell produces about 200 units per day, but improvement efforts are expected to increase productivity to approximately 220 units per day. The company's average annual demand is 50,000 units, and with operations limited to 245 days per year, the current capacity can be calculated using these figures.

Calculating current capacity per cell involves multiplying the expected output per day by the number of workdays. At the current productivity level of 200 units per day over 245 days, each cell produces 49,000 units annually (200 units/day x 245 days). As such, the current capacity per cell falls below the annual demand, indicating the necessity to plan for additional capacity for future growth.

Anticipating a tripling of demand within two years transforms the demand projection to approximately 150,000 units annually (3 x 50,000 units). To determine the number of cells required, the future capacity need must be aligned with this forecasted demand. Dividing the future demand of 150,000 units by the annual output per cell at the projected productivity level (220 units/day x 245 days = 53,900 units) results in approximately 2.78 cells. Since partial cells are not feasible, this number must be rounded up to the next whole number, which is three cells.

Thus, the company should plan to acquire at least three machine cells to satisfy future demand projections, considering the expected increase in productivity. It is prudent for the company to purchase four cells to ensure a buffer for unforeseen variances in productivity or demand, and to accommodate possible setbacks in efficiency improvements. Strategic capacity planning must therefore account for both anticipated growth and operational uncertainties.

In conclusion, based on current productivity estimates, future demand forecasts, and operational considerations, the company should plan to acquire at least three additional machine cells to meet the projected demand within two years. Overestimating capacity ensures the company is prepared for growth and reduces the risk of unmet customer demand, which could adversely affect market share and profitability.

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