Bob's candle factory is considering three different manufacturing options. Option A uses hand labor with fixed costs of $10,000 and variable costs of $2.75/candle. Option B uses a combination of hand and automation with fixed costs of $15,000 and variable costs of $1.10/candle. Option C is highly automated with fixed costs of $20,000 and variable costs of $0.75/candle. a. If demand for Bob's candles is 2500, which option should he pick, and what is the cost? b. If demand for Bob's candles is 4500 which option should he pick, and what is the cost?

Bob's candle factory is considering three different manufacturing options. Option A uses hand labor with fixed costs of $10,000 and variable costs of $2.75/candle. Option B uses a combination of hand and automation with fixed costs of $15,000 and variable costs of $1.10/candle. Option C is highly automated with fixed costs of $20,000 and variable costs of $0.75/candle. a. If demand for Bob's candles is 2500, which option should he pick, and what is the cost? b. If demand for Bob's candles is 4500 which option should he pick, and what is the cost?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 11P

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