question archive Power Notebooks, Inc
Power Notebooks, Inc
Subject:MathPrice: Bought3
Power Notebooks, Inc., plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $75. The number of notebooks that eventually will be produced (Q) is unknown at this point.
1. Formulate a mathematical model that will display the total cost of both options for any value of Q.
2. Use a graphical method to determine the BEP for Q (the quantity at which both options yield the same cost).
3. Use an algebraic procedure to determine the BEP for Q.
