B8. The following appeared in a presentation by the chief production manager of a machine parts manufacturing company at a management meeting:
“Our factory in Cookville is our most advanced and efficient. It is capable of producing ten drill bits for each dollar of production costs, whereas none of our other factories can produce more than seven drill bits per dollar of production costs. Therefore, we can reduce our overall drill bit production costs by devoting the Cookville factory entirely to drill bit production. Since reducing the production costs of individual machine parts is the only way to achieve our larger goal of reducing our overall production costs, dedicating the Cookville factory entirely to drill bit production and shifting all other machine part production to our other factories will help us to attain that larger goal.”
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