A firm has received an order for 25 die cast parts made from precious metals. The parts

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A firm has received an order for 25 die cast parts made from precious metals. The parts will sell for $5000 each; it will cost $2500 to produce an individual part. The probability of a part meeting final inspection equals 0.98. Parts not sold, good and bad, can be recycled at a value of $1000. A penalty clause in the contract results in the firm having to pay the customer $500 per unit short. Determine the number of parts to be scheduled for production to maximize expected profit.

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Facilities Planning

ISBN: 9780470444047

4th Edition

Authors: James A. Tompkins, John A. White, Yavuz A. Bozer, J. M. A. Tanchoco

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