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Problem 7-23 Roedel Electronics produces a variety of electrical components, including a remote control for televisions and a remote control for DVD players. Each remote
Problem 7-23 Roedel Electronics produces a variety of electrical components, including a remote control for televisions and a remote control for DVD players. Each remote control consists of three subassemblies that are manufactured by Roedel: a base, a cartridge, and a keypad. Both remote controls use the same base subassembly, but different cartridge and keypad subassemblies. Roedel's sales forecast indicates that 7000 TV remote controls and 5000 DVD remote controls will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier: 0.9 Setup Manufacturing Manufacturing Purchase Cost Subassembly Cost($) Time per Unit(min.) Cost per Unit($) per Unit($) Base 1000 0.40 0.65 TV cartridge 1200 2.2 2.90 3.45 DVD cartridge 1900 3.0 3.15 3.70 TV keypad 1500 0.8 0.30 0.50 DVD keypad 1500 1.0 0.55 0.70 a. Determine how many units of each subassembly Roedel should manufacture and how many units Roedel should purchase. Variable names Value No. of bases manufactured 12000 No. of bases purchased 700 5000 No. of TV cartridges made No. of TV cartridges purchased No. of DVD cartridge made No. of DVD cartridge purchased No. of TV keypads made No. of TV keypads purchased No. of DVD keypads made No. of DVD keypads purchased 7000 5000 What is the total manufacturing and purchase cost associated with your recommendation? b. Suppose Roedel is considering purchasing new machinery to produce DVD cartridges. For the new machinery, the setup cost is $3000; the manufacturing time is 2.5 minutes per cartridge, and the manufacturing cost is $2.60 per cartridge. Assuming that the new machinery is purchased, determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. Variable names Value No. of bases manufactured No. of bases purchased No. of TV cartridges made No. of TV cartridges purchased No. of DVD cartridge made No. of DVD cartridge purchased No. of TV keypads made No. of TV keypads purchased No. of DVD keypads made No. of DVD keypads purchased What is the total manufacturing and purchase cost associated with your recommendation? Do you think the new machinery should be purchased? Explain The input in the box below will not be graded, but may be reviewed and considered by your instructor
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