Exploiting Internal Linkages

$($with specialized parts required$)$ and expected activity demand $($with only commodity parts required$)$ are provided.

Additionally, the following activity cost data are provided:

Material usage: $$14$ per specialized part used; $$24$ per commodity part; no fixed activity cost.

Installing parts: $$28$ per direct labor hour; no fixed activity cost.

Required:

Material usage cost reduction :

Labor usage cost reduction

Purchasing cost reduction

Total savings

cent.

Total savings

by $$

to $

New price

by $

to $q$