A manufacturing company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The annual fixed costs for machine A are $20,000 and for machine B, $35,000. The variable cost for A is $12 per unit and for B, $8. The revenue per unit is $30. Identify the annual production volumes for which each of the machines would be chosen.

A manufacturing company wants to increase capacity by adding a new machine. The firm is considering proposals from vendor A and vendor B. The annual fixed costs for machine A are $20,000 and for machine B, $35,000. The variable cost for A is $12 per unit and for B, $8. The revenue per unit is $30. Identify the annual production volumes for which each of the machines would be chosen.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 12P

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