Manufactures electronic navigation systems for automobiles

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Reference no: EM131645861

DigiNav Corporation manufactures electronic navigation systems for automobiles. They Currently produce two models: standard and deluxe. The manufacturing line, if it is dedicated only to standard models, can produce up to 250 units per week at the cost of $30,000. If it produces only deluxe models, 200 units can be produced in a week, and the cost is $38,000. Manufacturing capacity can be split between the two models in any proportion.

Each unit has to pass quality tests. For a standard unit, such tests take 4 minutes, while a deluxe unit needs 7 minutes. At most 20 hours per week are available for quality control, and each hour costs $120. 4% of the standard units and 5% of the deluxe untis fail the quality tests. These untis are discarded.

Standard models sell for $800 per unit, while deluxe models sell for $1200 per unit. It is the company's policy that no more than 25% of the units sold can be deluxe.

Reference no: EM131645861

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