A sudden increase in the demand for smoke detectors has left Jane's with insufficient capacity to meet demand. The company has seen monthly demand from its retailers for its electronic and battery-operated detectors rise to 20,000 and 10,000, respectively. Janes production process involves three departments: fabrication, assembly, and shipping. The relevant quantitative data on production are summarized as follows:

The company has the option to obtain additional units from a subcontractor, who has offered to supply up to 20,000 units per month in any combination of electric and battery-operated models, at a charge of $21.50 per unit. For this price, the subcontractor will test and ship its models directly to the retailers without using Janes production process.

Question: Using excel, what decisions would you think may change if the subcontractor charges $21.50 per unit of electronic but $16.00 per unit of battery-operated detectors? Explain why?

Department Monthly Available Fabrication 2,000 Assembly 4,200 Shipping 2,500 Hours Hours/Unit Hours/Unit (Electronic) (Battery) 0.10 0.20 0.20 0. 100 .15 0.15 Costs and Prices are reported below: Electronic Battery $18.80 $16.00 Variable cost/unit Retail Price $29.50 $28.00