A work center consists of 2 machines working 8 hours a day and 5 days a week. Historically, utilization has been 80% and efficiency has been 90%. To the nearest hour, what is the rated capacity?

To determine the rated capacity of a work center, you need to start with the total available hours and then factor in utilization and efficiency.

The work center consists of 2 machines, each operating 8 hours a day for 5 days a week. The total available hours for both machines can be calculated as follows:

2 machines x 8 hours/day x 5 days/week = 80 available hours per week.

Next, utilization and efficiency are applied to this total to determine the effective capacity. Utilization is a measure of how much of the available time is actually being used for production, expressed as a percentage, in this case, 80%. Efficiency measures how effectively the produced output meets the standard output, in this case, 90%.

Now, calculating the rated capacity:

1. Apply the utilization:

80 hours x 80% utilization = 64 hours.

2. Then apply the efficiency:

64 hours x 90% efficiency = 57.6 hours.

Rounding to the nearest hour gives us 58 hours. This calculation shows how both utilization and efficiency impact the overall rated capacity of the work center, leading to the conclusion that the rated capacity is indeed 58 hours.