(i)Under ideal conditions, a service bay at a Fast Lube can serve 6 cars per hour. The effective capacity and efficiency of a Fast Lube service bay are known to be 5.5 and 0.880, respectively. What is the minimum number of service bays Fast Lube needs to achieve an anticipated servicing of 200 cars per 8-hour day?
(ii)An electronics firm is currently manufacturing an item that has a variable cost of $.50 per unit and a selling price of $1.00 per unit. Fixed costs are $14,000. Current volume is30,000 units. The firm can substantially improve the product quality by adding a new piece of equipment at an additional fixed cost of $6,000. Variable cost would increase to $.60, but volume should jump to 50,000 units due to a higher-quality product. Should the company buy the new equipment?
