The Ranger group of industries has a factory that produces three types of action figures, types I, 2, and 3, on a make-to-order basis. The factory operates five days a week for 9 hours each day. The key decision facing the manager 6 what type of machine should be used to process each action figure during the coming quarter (13 weeks). Two types of machines can be used: captain and regular. Captain machines can be used to make all action figures and are the only machines that can produce certain action figures, such as The move action figures? Demands, variable costs for each type of machine, and production rates on the machines are given in the table below.

The factory has 30 regular machines and 6 captain machines. After manufacturing, the action figures are sent to the finishing department and then sold. My action figure that cannot be manufactured in the factory because of limited capacity we be purchased from an external supplier, Meshed at the factory and sold at the market selling price.

The Ranger group wants to determine now many of each type of action figure to produce at each of two sources. For trample, how many of figure type 1 to produce themselves on which machine, how many to outsource, etc.

Action figure 1 3 Demand 2 153,000 90,000 20,000 Captain machine capacity (action figures/hour) 9.4 10.4 8.8 Regular machine Machine cost capacity (action figures/hour) ($/action figure) 0 10.4 8.8 $1.30 $1.22 $1.00 Outsourcing Cost ($/action figure) $1.70 $1.50 $1.30