Roedel Electronics produces a variety of electrical components, including a remote controller for televisions and a remote controller for VCRs. Each controller consists of three subassemblies that are manufactured by Roedel: a base, a cartridge, and a keypad. Both controllers use the same base subassembly, but different cartridge and keypad subassemblies. Roedel’s sales forecast indicates that 7000 TV controllers and 5000 VCR controllers 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: Formulate a mixed integer model.
Subassembly Set up cost $ Manufacturing Time/ unit (minute) Manufacturing Cost/ uinit($) purcahse cost/unit ($)
Base 1000 0.9 0.4 0.65
TV Cartridge 1200 2.2 2.9 3.45
VCR 1900 3.0 3.15 3.70
TV Cartridge 1500 0.8 0.30 0.50
VCR Keypad 1500 1.0 0.55 0.70
Formulate a mixed integer model.