With sales approaching $150 million annually, RCI had experienced double-digit growth over the past few years. Its marketing department estimated that the demand for the three products for the upcoming quarter were 12,000 cartons of face cream, 8,000 cases of body cream, and 18,000 cases of hand cream. The manufacturing process consisted of a two-stage production procedure that used four ingredients: purified water, oil, scents and colours, and emulsifiers. Stage 1 involved materials preparation and initial mixing while stage 2 focused on final blending and packaging. RCI's available first-shift capacity for the next quarter was 15,000 labour-hours for stage 1 and 10,000 for stage 2. The first-shift hourly rate was $8.50 for stage 1 and $9.25 for stage 2. A second shift was available with a 10 per cent reduction in capacity and a 10 per cent increase in wage rates. The cost for raw materials was $1 per pound for purified water, $1.50 per pound for oil, $3 per pound for scents and colours, and $2 per pound for emulsifiers. The production department had available 200,000 pounds of purified water, 50,000 pounds of oil, 7,500 pounds of scents and colours, and 15,000 pounds of emulsifiers (see Exhibit 1).EXHIBIT 1: PRODUCT PRODUCTION REQUIREMENTS Criteria/Vendor Face Body Hand Cream Cream Cream Labour (hours/carton) Stage 1 1.5 1.8 1.0 Stage 2 0.8 1.0 0.5 Materials (pounds/carton) Water 8.0 6.0 7.0 Oil 1.0 3.0 2.0 Scents and colours 0.5 0.3 0.4 Emulsifiers 0.5 0.7 0.6At Rougir Cosmetics International (RCI)'s June 2016 board meeting, the rm's chief executive ofcer, (CEO), Shelly Anderson, reported that RC1 was planning its production schedule for the upcoming quarter. She stated that the rm did not have the internal capacity to meet the projected demand and that the only short-term possibility was to outsource some of the demand to a third-party supplier. She indicated that RC1 had been reluctant in the past to use vendors in this way because of the proprietary nature of the company's product line. However, she did state that she had been in negotiations with a local supplier that was prepared to sign a secrecy agreement. Anderson indicated that she would need board approval before proceeding down this path. The board's chairman asked how much of the projected product demand might have to be subcontracted out and cautioned against exposing RCI's complete product line to an outside vendor. Anderson stated that the analysis could be completed along with a recommendation within a week using RCI's analytics-based linear programming model and a further review of the candidate vendor