Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Falconn is a manufacturer of hard drives and the company is trying to select a single supplier for the printed circuit boards (PCBs) that go

Falconn is a manufacturer of hard drives and the company is trying to select a single supplier for the printed circuit boards (PCBs) that go into its main product. Two companies can provide the necessary PCBs SFCircuits and Jaycon. SFCircuits has a reputation for its products and charges a higher price on account of its reliability of supply and delivery. SFCircuits dedicates plant capacity to each 3 customer, and therefore supply is ensured. This allows SFCircuits to charge $12 for a PCB. Jaycon is a small supplier that has limited capacity but charges only $9 for a unit. Its reliability of supply, however, is in question. Jaycon may not have enough capacity and orders to Jaycon are not guaranteed. In a year of high demand for PCBs, Jaycon will have at most 90, 000 units available for Falcom. In low-demand years, all demand will be satisfied. If Falconn does not get PCBs from its suppliers, it needs to buy them on the spot market to make up for any shortage. Spot market price is $20 per unit when demand is low and $40 when demand is high. Demand in the PCB market has a 75% chance of being high

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Engineering Economics

Authors: Chan S. Park

5th edition

136118488, 978-8120342095, 8120342097, 978-0136118480

More Books

Students also viewed these General Management questions