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use excel solver , show and explain formulas Make or Buy: A sudden increase in the demand for smoke detectors has left Acme Alarms with
use excel solver , show and explain formulas
Make or Buy: A sudden increase in the demand for smoke detectors has left Acme Alarms with insufficient capacity to meet demand. The company has seen monthly demand from its retailers for its electronic and battery-operated detectors rise to 20,000 and 10,000 respectively, and Acme wishes to continue meeting demand. Acme's production process involves three departments: Fabrication, Assembly, and Shipping. The relevant quantitative data on production and prices are summarized below. Department Fabrication Assembly Shipping Variable cost/ unit Retail Price Monthly Hours Hours / Unit Hours / Unit Available (Electronic) (Battery) 2400 0.15 0.10 4200 0.20 0.20 2000 0.10 0.15 $17.00 $16.00 $30.00 $28.00 The company also has the option to obtain additional units from a subcontractor, who has offered to supply up to 20,000 units per month in any combination of electric and battery operated models, at a charge of $20.00 per unit. For this price, the subcontractor will test and ship its models directly to the retailers without using Acme's production process Determine how the manufacturer should allocate its in-house capacity and how it should utilize the subcontractor. What are the maximum profit and corresponding make/buy levels Step by Step Solution
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