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1) The management of Thompson Controls must decide between two manufacturing processes for its model B1 electronic thermostat.
The monthly cost of the first process is given by C1(x) = 25x + 20,000 dollars, where x is the number of thermostats produced; the monthly cost of the second process is given by C2(x) = 18x + 44,500 dollars.
a) Calculate the total cost that the company can expect through each of the processes with 2500 units capacity.
b) What process is better for them considering 2500 units? How about 3800 units?
c) If the company sells the thermostats for $72 each, how much is their monthly revenue at 3800 units?
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