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CMA Intermediate · Operations Management and Strategic Management · Production Planning and Control

A plant works one shift of 8 hours per day for 25 days in a month. Each machine is available for 90% of scheduled time, and there are 10 identical machines. Each machine produces 12 units per hour at standard rate. What is the effective monthly capacity in units?

Effective monthly capacity is 21,600 units. Each machine is scheduled for 200 hours, of which 90 percent, or 180 hours, is available. At 12 units per hour that gives 2,160 units per machine, and ten machines together produce 21,600 units.

  1. A24,000 units
  2. B21,600 unitsCorrect
  3. C19,440 units
  4. D23,100 units

Explanation

Scheduled hours per machine = 8 x 25 = 200. Available hours = 200 x 0.90 = 180. Units per machine = 180 x 12 = 2,160. For 10 machines = 21,600. The 24,000 option ignores the 90% availability, and 19,440 applies availability twice.

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