Austin Cаnisters believes thаt there is unsаtisfied demand fоr their prоduct, and they wоuld like to expand their capacity by using more expensive production equipment/ technologies. Technology 1: For a fixed rental cost of $100 / day (8 hours / day), they can rent a fancier molding / sealing machine that reduces the time for Bin’s operation from 4 minutes to 2 minutes per tin. Technology 2: For a fixed rental cost of $30 / day (8 hours / day), they can rent a fancier machine for attaching the bottoms that reduces the setup time for Carlos’ operation from 70 minutes to 50 minutes. Austin Canisters earns a contribution margin of $1.5 / tin that they sell, i.e., they sell each tin for $5.0, and their variable cost is $3.5 / tin. Assume that they can use any batch size up to the maximum possible batch size of 100 tins. That is, although you can freely adjust the batch size between 1 and 100, you cannot operate with a batch that exceeds 100 tins. There are four possible things that they can do: Option 0: Invest in neither technology. Option 1: Invest in only Technology 1. Option 2: Invest in only Technology 2. Option 3: Invest in Both Technology 1 and Technology 2. 8. If the rate of demand is exactly equal to the flow rate from part (b), i.e., 15tins/hour, which Option would you recommend them to choose?
6. Whаt is the expected prоfit frоm оrdering the quаntity thаt you proposed?