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A mobile phone company refurbishes used phones for resale. They currently have 60 phones that require screen repair and 40 phones that require battery repair. Each screen repair costs the company $8 and each batter repair costs $2. The company is limited in the number of repairs it can make though it has a total of 25 hours of labor that can be devoted to this project, and each screen repair takes 30 minutes, while each battery repair takes 15 minutes. As an alternative to in-house production, screen repairs can be outsourced at a cost of $10/phone and battery repairs can be outsourced at a cost of $3/phone. The company is trying to determine the number of each type of repair that should be performed in-house and the number that should be outsourced.

Operation Management, Management Studies

  • Category:- Operation Management
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