Question: Please show steps/explanations and do it in an excel. Will rate thumb up if correct thanks A sudden increase in the demand for smoke detectors

Please show steps/explanations and do it in an excel. Will rate thumb up if correct thanks

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. Acme's production process involves three departments: fabrication, assembly, and shipping. The relevant quantitative data on production and prices are summarized as follows:

Department Monthly Hours Available Hours/Unit (Electronic) Hours/Unit (Battery)
Fabrication 2,000 0.15 0.10
Assembly 4,200 0.20 0.20
Shipping 2,500 0.10 0.15
Variable cost/unit $18.80 $16.00
Retail price $29.50 $28.00

The company also has the option to obtain additional units from a subcontractor, who has offered to supply up to 20,000 units per month in any combination of electric and battery-operated models, at a charge of $21.50 per unit. For this price, the subcontractor will test and ship its models directly to the retailers without using Acme's production process.

  1. What are the maximum profit and the corresponding make/buy levels? (Fractional decisions are acceptable.)
  2. For how much of a change in fabrication capacity will the pattern persist?

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