ACME CO. HAS A CONTRACT TO PROVIDE A RETAILER WITH TWO MODELS OF DOODADS: 30,000 OF MODEL A AND 15,000 OF MODEL B. PRODUCTION CAPABILITY IS LIMITED AS INDICATED IN THE TABLE BELOW. COST TO MAKE MODEL A IS $55 AND TO MAKE MODEL B IS $85. A COMPETITOR CAN SUPPLY EQUIVALENT MODELS FOR $67 AND $95. HOW MANY OF EACH MODEL SHOULD THE COMPANY PRODUCE AND OUTSOURCE TO MINIMIZE OVERALL COST?

Hours/Unit needed	Model A	Model B	Hours Available
Production	0.2	0.4	10,000
Assembly	0.3	0.5	15,000
Packaging	0.1	0.1	5,000

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Question 2

ACME CO. IS CONDUCTING A BENCHMARKING SURVEY TO ASSESS THE SATISFACTION OF THEIR CUSTOMERS RELATIVE TO THOSE SERVED BY COMPETITORS. 4,000 COMPANIES WERE DIVIDED INTO 4 GROUPS BASED ON SIZE (L = LARGE COMPANIES, S = SMALL COMPANIES) AND WHETHER THEY WERE SERVED BY ACME OR NOT (A = ACME, N = NOT ACME). COSTS PER SURVEYARE SUMMARIZED IN THE TABLE ABOVE. WHAT IS THE MINIMUM COST WAY TO DEPLOY THE SURVEY THAT MEETS THE FOLLOWING CONDITIONS:

• AT LEAST 10% AND AT MOST 50% OF THE TOTAL COMPANIES SHOULD COME FROM EACH GROUP.

• AT LEAST 50% OF THE COMPANIES SURVEYED SHOULD BE SERVED BY ACME.
• AT LEAST 25% OF THE SURVEYS SHOULD BE DONE BY WEB CAM.
• AT MOST 40% OF THOSE SURVEYED MAY BE SMALL COMPANIES.
• AT MOST 25% OF THE SMALL COMPANIES SURVEYED MAY BE DONE BY WEB CAM.

• AT LEAST 50% OF THE LA GROUP SHOULD BE DONE BY WEB CAM.

Thingamabobs	Whatchamacallit(in ppm)	Widget Dust (in kg)	Steam (in LBS/ton)
1	1.100	1.7	24,000
2	3,500	3.2	36,000
3	1,300	2.4	28,000

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