A manufacturing firm is trying to decide if it should purchase an automated assembly line. The firm currently has employees completing the assembly portion of its production line. The workers are very efficient; a single worker can produce 5 assembled products per hour. An average worker earns $42.50 per eight-hour day. The automated assembly line can produce 2000 assembled products in eight hours. The company estimates that the costs associated with the automated assemble line total $250 per hour.
a. Should the company use the automated assembly line? Why or why not?
b. The manufacturer of the assembly line is anticipating an increase in the price of its product. What would be the maximum hourly capital cost that you would be willing to incur?

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The Answer of A manufacturing firm is trying to decide if it should purchase an automated assembly line. The firm currently has employees completing the assembly portion of its production line. The workers are very efficient; a single worker can produce 5 assembled products per hour. An average worker earns $42.50 per eight-hour day. The automated assembly line can produce 2000 assembled products in eight hours. The company estimates that the costs associated with the automated assemble line total $250 per hour.
a. Should the company use the automated assembly line? Why or why not?
b. The manufacturer of the assembly line is anticipating an increase in the price of its product. What would be the maximum hourly capital cost that you would be willing to incur?

A Manufacturing Firm Is Trying to Decide If It Should