Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lil' Racers, Inc. manufactures high performance go-karts for kids. The go-karts use wiring harnesses that can either be manufactured in-house or purchased from an outside

Lil' Racers, Inc. manufactures high performance go-karts for kids. The go-karts use wiring harnesses that can either be manufactured in-house or purchased from an outside vendor. The company utilizes three models of harnesses to fulfill the needs of all the models of their products. The table below lists the models, cost to manufacture in-house, purchase cost, as well as the forecasted demand over the next planning period.

Harness Model Manufacturing Cost Purchase Cost Demand
WH-10 $1.38 $1.59 1,250
WH-15 $1.52 $1.61 1,500
WH-20 $1.83 $2.15 800

Manufacturing of the harnesses requires work to be performed in up to three different departments (A, B, and C). The table below indicates the available capacity of each department as well as the unit time each harness is consuming in each department. Note that the WH-10 harness does not spend any time in department C.

Department Capacity (hrs) WH-10 (min) WH-15 (min) WH-20 (min)
A 10 0.89 0.95 1.15
B 12.5 0.95 1.99 3.51
C 20 - 0.60 0.65

Determine the optimal procurement strategy to satisfy the harness demands while minimizing costs. Assume that decision variables can be represented as continuous real numbers.

An MS Excel workbook containing the data described in this problem statement is linked below for your convenience. GoKart_MakeOrBuy_Student.xlsx

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

Step: 3

blur-text-image

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

Strategic Management

Authors: John Pearce , Richard Robinson

13th Edition

0078029295, 978-0078029295

More Books

Students also viewed these General Management questions