Answer the following questions using the information below:
Henry Inc., a manufacturing firm, is able to produce 1,000 pairs of sneakers per hour, at maximum efficiency. There are three eight-hour shifts each day. Due to unavoidable operating interruptions, production averages 800 units per hour. The plant actually operates only 27 days per month. Based on the current budget, Henry estimates that it will be able to sell only 500,000 units due to the entry of a competitor with aggressive marketing capabilities. But the demand is unlikely to be affected in future and will be around 515,000. Assume the month has 30 days.
-What is the theoretical capacity for the month?
A) 1,000,000 units
B) 720,000 units
C) 518,800 units
D) 240,000 units

Question

Quizplus · Accepted Answer

The theoretical capacity is calculated by multiplying the maximum production rate by the total available hours in a month. Henry Inc. can produce 1,000 pairs per hour, with three 8-hour shifts per day, for 30 days. Thus, 1,000 pairs/hour * 24 hours/day * 30 days = 720,000 units.

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