NAYLOR SECURITY INC.: PRODUCTION PLANNING For seven years, Naylor Security had been developing security products such as palmprint and fingerprint entry pads as well as voice print analysis equipment. It has enjoyed con- siderable success for most of that time. Its security devices are being used to control access to businesses, labs, factories, and high-security installations around the world. The com- pany operates in North America through its Toronto office and in Asia through its Beijing facility. The manufacturing of Naylor products is done in both locations. However, U.S. government purchasers (who account for half the Toronto plant's revenue) typically are hesitant to buy non-NAFTA-produced security devices. The security sector has become highly competitive in recent years, and while there are plenty of potential new customers, there are also plenty of new competitors. The company had usually enjoyed strong profits; but those profits have declined in the past year. The company makes three products: a fingerprint analyzer, a palmprint analyzer, and a voiceprint analyzer. All three products can be made in either Toronto or Beijing. At present, the Toronto plant manufactures all three products, although it could choose to buy them from Beijing. The Toronto plant's sales volumes and production data on a monthly basis are as follows (refer image)

Palm print Fingerprint Voice print Units produced 550 1, 050 900 Unit selling price 695 450 850 Material cost 100 175 125 Labour cost 135 150 75 Cost if Naylor buys from Beijing plant 495 425 195