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Company Analysis Machine hours for each product of the CPC changed between 1992 and 1993 as the Product Manager attempted to reduce overtime costs Table 1 below shows estimated machine hours per machine for each product in 1992 and Table 2 shows the same information for 1993 Table 1 - Estimated Machine Hours for Per Machine per Product - 1992 Product IProduct JProduct KTotal Hours per Machine Machine A9297693082006 Machine B7979622562015 Machine C5586413851583 Total Hours per Product228423729495604 Table 2 - Estimated Machine Hours for Per Machine per Product - 1993 Product IProduct JProduct KTotal Hours per Machine Machine A7696156152000 Machine B6597695131941 Machine C4625137691744 Total Hours per Product1890189718975685 As you can see from the data above total machine hours increased from 1992 to 1993 This occurred as a result of the Production Manager attempting to reduce overtime by limiting each machine to a maximum of 2000 hours So machine hours for Product I and J were reduced and machine hours for Product K were increased But the total number of units produced in 1993 actually decreased see Appendix 1 for further detail So compared to 1992 more machine hours were utilised in 1993 to produce less units As a result of this change in assigning machine hours several sales orders were unable to be fulfilled because they could not be produced in the normal delivery time These were predominantly orders for Products I and J although a few for Product K were missed as well The data above also highlights that machine capacity is a real issue for this company In 1993 the machines were used to near full capacity and sales orders still went unfulfilled This is causing a bottleneck in the factory as the number of units that can be produced is being limited by the capacity of the machines The company made a loss in 1993 compared to breaking even in 1992 see Appendix 2
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