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A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing. Assume that the daily demand for hubs allows all defect-free
A bicycle component manufacturer produces hubs for bike wheels. Two processes are possible for manufacturing. Assume that the daily demand for hubs allows all defect-free hubs to be sold. Additionally, tested or rejected hubs cannot be sold. Find the process that maximizes profit per day if each part is made from
$4
worth of material and can be sold for
$32.
Both processes are fully automated, and variable overhead cost is charged at the rate of
$39
per hour.
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