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Refer to the exhibit.
A company requires 2,000 units each of components X, Y and Z during the next period. All three components are made on the same machine which has a capacity of 26,000 hours for next period. No inventories are held.
Data for the three components are as follows:
In order to minimize cost, how many units of component X should be purchased from the external supplier?
Suggested Answer: B
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27 comments · newest first
YO
Yolande
10 months ago
I disagree, 500 units might be a safer bet.
NI
Nieves
10 months ago
I think they should go for option A, none from the supplier.
LI
Lili
11 months ago
Wait, can they really produce all that in 26,000 hours?
HE
Herman
11 months ago
Sounds too good to be true, how does that even work?
LE
Lezlie
11 months ago
The company needs 2,000 units of each component.
BR
Brandee
11 months ago
I vaguely recall that if the machine can handle all the components, we might not need to buy any from the supplier. But I can't remember the exact calculations we did.
RO
Rosalind
12 months ago
I'm a bit confused about whether we should prioritize internal production or just buy everything externally. I hope I remember the cost minimization strategy correctly.
CO
Coral
12 months ago
I think we had a similar practice question where we had to decide how much to outsource. I feel like the answer might depend on the machine's capacity.
EL
Elke
12 months ago
I remember we discussed how to calculate the total hours needed for each component, but I'm not sure how to apply that here.
BE
Bettina
1 year ago
I'm a bit confused by this one. There are a lot of factors to consider, like the capacity of the machine and the production times for each component. I'll need to take my time and really think through the best solution.
XE
Xenia
1 year ago
Okay, I think I've got a strategy here. I'll need to minimize the total cost by balancing the internal production and external purchase of component X. Let me work through the numbers.
DO
Domingo
1 year ago
Hmm, this is a tricky one. I'll need to do some calculations to figure out the best approach. Maybe I should start by looking at the production time for each component.
CH
Christa
1 year ago
This looks like a classic optimization problem. I'll need to carefully analyze the capacity constraints and component requirements to determine the optimal number of units to purchase externally.
KI
Kirk
1 year ago
I'm feeling lucky, so I'm going to go with A) None. If we can't make all the components internally, we should just cancel the project and take a vacation. Who needs components anyway? *laughs*
BI
Billye
1 year ago
I agree with Gwen. B) 500 seems like the correct answer to minimize cost.
JE
Jean
1 year ago
D) 2,000 all the way! Why bother with the hassle of calculating production capacities and stuff? Just buy everything from the external supplier and call it a day. Easy peasy!
EI
Eileen
1 year ago
A) None
GW
Gwen
1 year ago
Because the machine has a capacity of 26,000 hours and we need 2,000 units of each component. So, we can only produce 24,000 units in total.
RE
Rebeca
1 year ago
Hmm, this seems like a classic optimization problem. I'm going to go with C) 1,500. That way, we can maximize the use of our in-house production capacity and only buy what we can't make ourselves.
LA
Lashandra
1 year ago
User2: I agree with User1. Buying 1,500 units seems excessive.
DE
Desmond
1 year ago
User1: I think the answer is B) 500. We should only buy what we absolutely need.
HE
Herman
1 year ago
I think the answer is B) 500. The company requires 2,000 units each of components X, Y, and Z, and the machine has a capacity of 26,000 hours. If we can't make all the components internally, it's best to purchase the minimum number of units from the external supplier to minimize cost.
SH
Shalon
1 year ago
I believe the answer is D) 2,000. It's important to ensure we have enough units of each component to meet the company's requirements.
LE
Lenita
1 year ago
I think the answer is C) 1,500. We need to consider the capacity of the machine and the total units required for all components.
VA
Van
1 year ago
I agree with you, the answer is B) 500. It makes sense to purchase the minimum number of units from the external supplier to minimize cost.
AM
Amber
1 year ago
Why do you think it's 500?
GW
Gwen
1 year ago
I think the answer is B) 500.