Company ARI’s current machine operators are well trained. They can operate bronze machines as well as injection molding machines. However, it is obvious that they can operate only one machine at a time, which could be either bronze machine or injection molding machine.
From the capacity utilization cells, it is evident that the capacity utilization for Bronze production is greater than 100% in 3rd and 4th year. The situation that, one or more workers working on the same machine cannot exists practically, which is opposed to what the calculations shows. Thus, it implies that in the 3rd and 4th year, the company has insufficient labor and machine production capacity.
Therefore, an addition of two more machines will create demand for at least two more operators. It is not important to consider whether an operator is capable of operating different machines, rather than the fact that he can operate only one machine at a time.
Thus, one can say that with addition of two more machine the labor will also need to be increased, which will increase the cost for ARI.