Amazon forecasts the following demand for a product (in thousands of units) over the next five years

Amazon forecasts the following demand for a product (in thousands of units) over the next five years.

Year 1 2 3 4 5

Forecast Demand 44 47 49 53 58

The company outsources its manufacturing to Chip manufacturing. Chip has six machines that operate on a two-shift (8 hours each) basis. There are 240 workdays in a year and fifteen days per year are used for scheduled maintenance of equipment with no process output. Each manufactured unit takes 26 minutes to produce.

a. What is the capacity of the factory in units per year?

b. At what capacity levels (percentage of normal capacity) would the firm be operating over the next five years based on the forecasted demand? (Hint: Compute the ratio of demand to capacity each year.)

c. Does the firm need to buy more machines? If so, how many? When? If not, justify.