Problem 10.8 (Maximum price to be paid for purchased part). ABC Ltd. an LPG cylinder manufacturing unit, gets an order from the Oil Corporation for supply of 40,000 cylinders at the standard price of Rs. 700 per cylinder. Getting orders is a major problem. If an order is not executed in full for any reason not only will ABC Ltd. lose the benefit, but it stands the risk of the order quantity being reduced for the next quarter also. The cylinders are made in two halves and then welded together. The cost structure is: Materials 12.5 kg. per half Labour Rs. 50 per half. Welding charges and fitting charges would be Rs. 30 per cylinder. Unfortunately special steel plates are in short supply and ABC Ltd. has only stock of 500 MT. Another friendly unit which has, in anticipation, made bottom halves, has offered to supply 40,000 numbers. What is the maximum price ABC Ltd. can pay to the unit for the bottom halves? Transportation and unloading, etc. will cost Rs. 5 per each half. Problem 10.8 (Maximum price to be paid for purchased part). ABC Ltd. an LPG cylinder manufacturing unit, gets an order from the Oil Corporation for supply of 40,000 cylinders at the standard price of Rs. 700 per cylinder. Getting orders is a major problem. If an order is not executed in full for any reason not only will ABC Ltd. lose the benefit, but it stands the risk of the order quantity being reduced for the next quarter also. The cylinders are made in two halves and then welded together. The cost structure is: Materials 12.5 kg. per half Labour Rs. 50 per half. Welding charges and fitting charges would be Rs. 30 per cylinder. Unfortunately special steel plates are in short supply and ABC Ltd. has only stock of 500 MT. Another friendly unit which has, in anticipation, made bottom halves, has offered to supply 40,000 numbers. What is the maximum price ABC Ltd. can pay to the unit for the bottom halves? Transportation and unloading, etc. will cost Rs. 5 per each half