Sell or Process Further- Port Allen Chemical Company
Outsourcing (Make-or-Buy) Decision – Hewlett-Packard
September 26, 2018CTU BADM440 PHASE 2 discussions
September 26, 2018Sell or Process Further- Port Allen Chemical Company
Port Allen Chemical Company processes raw material D into joint
products E and F. Raw material D costs $4 per liter. It costs $100 to convert
100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold
immediately for $4 per liter or processed further into Product G at an additional
cost of $6 per liter. Product G can then be sold for $14 per liter.
Determine whether Product F should be sold or processed further into
Product G. Calculate the net benefit (cost) of further processing. $Answer
per liter