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Suppose the company has the option to subcontract the production of up to 1 0 , 0 0 0 small stuffed animal toys to an

Suppose the company has the option to subcontract the production of up to 10,000 small
stuffed animal toys to an external supplier at a cost of $22 per animal toy. Determine the
optimal distribution of units for each size of toys (including special-order units, small, and
large toy units) that should be produced in-house and subcontracted.
vi. Evaluate the viability of subcontracting the production for the company based on the
calculations provided in (v). Provide an explanation supported by relevant calculations.
vii. Recommend a suitable price for the subcontracted production, justifying your choice with
calculations.
viii. Provide three qualitative factors you would advise the company to take into consideration
for the subcontracted production.

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