Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and hold the device at a preferred angle for easy viewing and typing. Roedel produces two different sizes of integrated keyboard tablet stands, small and large. Each size uses the same keyboard attachment, but the stand consists of two different pieces, a top flap and a vertical stand that differ by size. Thus, a completed integrated keyboard tablet stand consists of three subassemblies that are manufactured by Roedel: a keyboard, a top flap and a vertical stand. Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier: Manufacturing Subassembly Setup Cost ($) Time per Unit (min.) Cost per Unit ($) Purchase Cost per Unit ($) Keyboard 1,000 2.1 0.40 0.65 Small top flap 1,200 2.2 2.90 3.35 Large top flap 1,900 3.0 3.15 3.70 Small vertical stand 1,500 0.8 0.30 0.55 Large vertical stand 1,500 1.0 0.55 0.90 If required, round your answers to nearest whole number. (a) Determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”. Round your answers to the nearest whole number, if necessary. Quantity Subassembly Production Purchase Keyboard Small Top Flap Large Top Flap Small Vertical Stand Large Vertical Stand What is the total manufacturing and purchase cost associated with your recommendation? $ (b) Suppose Roedel is considering purchasing new machinery to produce large top flaps. For the new machinery, the setup cost is $3,000; the manufacturing time is 2.5 minutes per unit , and the manufacturing cost is $2.60 per unit. Assuming that the new machinery is purchased, determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”. Quantity Subassembly Production Purchase Keyboard Small Top Flap Large Top Flap Small Vertical Stand Large Vertical Stand What is the total manufacturing and purchase cost associated with your recommendation? $ Do you think the new machinery should be purchased? Explain. (i) Assuming the new machinery can be used in future seasons, it would be beneficial for Roedel to purchase the new equipment. (ii) The new machinery is too expensive for Roedel to purchase.

Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and hold the device at a preferred angle for easy viewing and typing. Roedel produces two different sizes of integrated keyboard tablet stands, small and large. Each size uses the same keyboard attachment, but the stand consists of two different pieces, a top flap and a vertical stand that differ by size. Thus, a completed integrated keyboard tablet stand consists of three subassemblies that are manufactured by Roedel: a keyboard, a top flap and a vertical stand. Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier: Manufacturing Subassembly Setup Cost ($) Time per Unit (min.) Cost per Unit ($) Purchase Cost per Unit ($) Keyboard 1,000 2.1 0.40 0.65 Small top flap 1,200 2.2 2.90 3.35 Large top flap 1,900 3.0 3.15 3.70 Small vertical stand 1,500 0.8 0.30 0.55 Large vertical stand 1,500 1.0 0.55 0.90 If required, round your answers to nearest whole number. (a) Determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”. Round your answers to the nearest whole number, if necessary. Quantity Subassembly Production Purchase Keyboard Small Top Flap Large Top Flap Small Vertical Stand Large Vertical Stand What is the total manufacturing and purchase cost associated with your recommendation? $ (b) Suppose Roedel is considering purchasing new machinery to produce large top flaps. For the new machinery, the setup cost is $3,000; the manufacturing time is 2.5 minutes per unit , and the manufacturing cost is $2.60 per unit. Assuming that the new machinery is purchased, determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”. Quantity Subassembly Production Purchase Keyboard Small Top Flap Large Top Flap Small Vertical Stand Large Vertical Stand What is the total manufacturing and purchase cost associated with your recommendation? $ Do you think the new machinery should be purchased? Explain. (i) Assuming the new machinery can be used in future seasons, it would be beneficial for Roedel to purchase the new equipment. (ii) The new machinery is too expensive for Roedel to purchase.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Question

Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a subassembly in-house, it incurs a fixed setup cost as well as a variable manufacturing cost. The following table shows the setup cost, the manufacturing time per subassembly, the manufacturing cost per subassembly, and the cost to purchase each of the subassemblies from an outside supplier:

		Manufacturing
Subassembly	Setup Cost ($)	Time per Unit (min.)	Cost per Unit ($)	Purchase Cost per Unit ($)
Keyboard	1,000	2.1	0.40	0.65
Small top flap	1,200	2.2	2.90	3.35
Large top flap	1,900	3.0	3.15	3.70
Small vertical stand	1,500	0.8	0.30	0.55
Large vertical stand	1,500	1.0	0.55	0.90

If required, round your answers to nearest whole number.

(a)

Determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”. Round your answers to the nearest whole number, if necessary.

	Quantity
Subassembly	Production	Purchase
Keyboard
Small Top Flap
Large Top Flap
Small Vertical Stand
Large Vertical Stand

What is the total manufacturing and purchase cost associated with your recommendation?

(b)

Suppose Roedel is considering purchasing new machinery to produce large top flaps. For the new machinery, the setup cost is $3,000; the manufacturing time is 2.5 minutes per unit , and the manufacturing cost is $2.60 per unit. Assuming that the new machinery is purchased, determine how many units of each subassembly Roedel should manufacture and how many units of each subassembly Roedel should purchase. If an amount is zero, enter “0”.

	Quantity
Subassembly	Production	Purchase
Keyboard
Small Top Flap
Large Top Flap
Small Vertical Stand
Large Vertical Stand

What is the total manufacturing and purchase cost associated with your recommendation?

Do you think the new machinery should be purchased? Explain.

(i)	Assuming the new machinery can be used in future seasons, it would be beneficial for Roedel to purchase the new equipment.
(ii)	The new machinery is too expensive for Roedel to purchase.

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