Question: The superstructure production team needs some help understanding what their optimum outsourcing strategy should be . They have three main operations: welding, painting and assembly.
The superstructure production team needs some help understanding what their optimum outsourcing strategy should be They have three main operations: welding, painting and assembly. Each operation must occur in order to produce a superstructure. They can outsource the welding, painting or both, but must do the assembly internally. The following table describes the hours required for each basic superstructure type, available hours, demand, and revenue received for each superstructure for the next twoweek planning period.
tableHours required,Alpha,Beta,Gamma,Available hrsWeldingPaintingAssemblyDemandRevenue each,$$$
Their outsourcing option has given them the following cost per unit for welding and painting.
tableOutsource Cost per unitAlpha,Beta,GammaWelding$$$
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