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Make or Buy: A sudden increase in the demand for smoke detectors has left Acme Alarms with insufficient capacity to meet demand. The company has

Make or Buy:A sudden increase in the demand for smoke detectors has left Acme Alarms 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, and Acme wishes to continue meeting demand. Acme's production process involves three departments: Fabrication, Assembly, and Shipping. The relevant quantitative data on production and prices are summarized below.

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Department Fabrication Assembly Shipping Variable cost/ unit Retail price Monthly hours available 2000 4200 2500 Hours/ unit (electronic) 0.15 0.20 0.10 $18.80 $29.50 Hours/ unit (battery) 0. 10 0.20 O. l 5 $16.00 $28.00

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