Identify ways of increasing capacity, and consider the costs and benefits of doing so.

Bob & Fred, Inc., has a bottleneck operation whose capacity is 100 units per day. Other operations have a capacity of 120 units per day. Each unit has a throughput margin of $80. The bottleneck operation employs 2 workers, each of whom could run 3 machines. The operation currently has 5 machines, each of which can process 20 units per day. Bob & Fred could hire additional workers at $120 per day, or could rent an additional machine for $2,000 per day. Identify ways of increasing capacity, and consider the costs and benefits of doing so.

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