2. Production Planning for Components Rummel Electronics produces two PC cards, a modem and a network adapter Demand for these two products exceeds the amount that the firm can make, but there are no plans to increase production capacity in the short run. Instead, the firm plans to use subcontracting The two main Stages of production are fabrication and assembly, and either step can be subcontracted for either type of card However, the company policy is not to subcontract both steps for either product (That is, if modem cards are fabricated by a subcontractor, then they must be assembled in house.) Components made by subcontractors must pass through the shipping and receiving departments, just like components made internally. At present, the firm has 5200 hours available in fabrication, 3600 in assembly 3200 in shipping inspection The production requiremenes, in houes per unit, are given in the following table: and Fabrication 0.35 0.47 Product/mode Modem, made entirely in-house Network, made entirely in-house Modem, fabricated by sub Network, fabricated by sub Modem, assembled by sub Network, assembled by sub 0.35 0.47 The direct material costs for the modern cards are $3.25 for manufacturing and $0.50 for assembly: for network cards, the casts are $6.10 and So.o. Subcontracting the manufacturing operation costs $5.35 for modem cards and $8.50 for network cards. Subcontracting the assembly operation costs $1.50 for either product. Modem cards sell for S20, and network cards sell for $28. The firm's policy, for each product, is that at most 40% of the units produced can have subcontracted fabrication, and at mast 70% of the units can have subcontracted assembly (al Determine the production and subcontracting schedule that maximizes profits. How many units of each product should be sold, in the optimal plan? What total volume should the subxontractor handle? 2. Production Planning for Components Rummel Electronics produces two PC cards, a modem and a network adapter Demand for these two products exceeds the amount that the firm can make, but there are no plans to increase production capacity in the short run. Instead, the firm plans to use subcontracting The two main Stages of production are fabrication and assembly, and either step can be subcontracted for either type of card However, the company policy is not to subcontract both steps for either product (That is, if modem cards are fabricated by a subcontractor, then they must be assembled in house.) Components made by subcontractors must pass through the shipping and receiving departments, just like components made internally. At present, the firm has 5200 hours available in fabrication, 3600 in assembly 3200 in shipping inspection The production requiremenes, in houes per unit, are given in the following table: and Fabrication 0.35 0.47 Product/mode Modem, made entirely in-house Network, made entirely in-house Modem, fabricated by sub Network, fabricated by sub Modem, assembled by sub Network, assembled by sub 0.35 0.47 The direct material costs for the modern cards are $3.25 for manufacturing and $0.50 for assembly: for network cards, the casts are $6.10 and So.o. Subcontracting the manufacturing operation costs $5.35 for modem cards and $8.50 for network cards. Subcontracting the assembly operation costs $1.50 for either product. Modem cards sell for S20, and network cards sell for $28. The firm's policy, for each product, is that at most 40% of the units produced can have subcontracted fabrication, and at mast 70% of the units can have subcontracted assembly (al Determine the production and subcontracting schedule that maximizes profits. How many units of each product should be sold, in the optimal plan? What total volume should the subxontractor handle