Question

A production manger faced withthe question of how to allocate the manufacturing of a microwave oven between his own company and subcontractor because neither firm can handle the demand alone. Fabrication cost are br.10 per unit with in the company and br.20 per unit for the subcontractor. Or assembly cost are br.8 per unit with in the company and br.5 for the subcontractor: and inspection cost are br.3 per unit within the company and br.1 per unit from the subcontractor. The company has a budget of br.120,000 from the fabrication .br.40,000 for assembly .and br.12,000 for inspection .the contribution to profit is br 60 per unit regardleass of which firm does the work A. What is theoptimal solution B. How m7ch profit will it yield C. How m7ch of thr total budget will be unused by the optimal solution?

Answer 1

Explanation:

production manger faced withthe question of how to allocate the manufacturing of a microwave oven between his own company and subcontractor because neither firm can handle the demand alone. Fabrication cost are br.10 per unit with in the company and br.20 per unit for the subcontractor. Or assembly cost are br.8 per unit with in the company and br.5 for the subcontractor: and inspection cost are br.3 per unit within the company and br.1 per unit from the subcontractor. The company has a budget of br.120,000 from the fabrication .br.40,000 for assembly .and br.12,000 for inspection .the contribution to profit is br 60 per unit regardleass of which firm does the work A. What is theoptimal solution B.