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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 small
stuffed animal toys to an external supplier at a cost of $ per animal toy. Determine the
optimal distribution of units for each size of toys including specialorder units, small, and
large toy units that should be produced inhouse 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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