Question: Make or Buy A sudden increase in the demand for smoke detectors has left Acme Alarms with insufficient capacity to meet demand. The company has

Make or Buy A sudden increase in the demand for smoke detectors has left Acme Alarms with insufficient capacity to meet demand. The company has seen monthly demand from its retailers for its electronic and battery-operated detectors rise to 20,000 and 10,000, respectively, and Acme wishes to continue meeting demand. Acme's production process involves three departments: Fabrication, Assembly, and Shipping. The relevant quantitative data on production and prices are summarized below.

Make or Buy A sudden increase in the demand for smoke detectors

Monthly hours Hours/ unit Hours/ unit Department available (electronic) (battery) Fabrication 2000 0. 15 0. [0 Assembly 4200 0.20 0. 20 Shipping 2500 0. l0 0. 15 Variable S l 8.80 $16.00 cost/ unit Retail price $29.50 $28.00

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