A company can produce an item or buy it from a contractor. If it is produced, it
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A company can produce an item or buy it from a contractor. If it is produced, it will cost $20 each time the machines are set up. The production rate is 100 units per day. If it is bought from a contractor, it will cost $15 each time an order is placed. The cost of maintaining the item in stock, whether bought or produced, is $.02 per unit per day. The company's usage of the item is estimated at 26,000 units annually. Assuming that no shortage is allowed, should the company buy or produce?
Related Book For
Mathematical Applications for the Management Life and Social Sciences
ISBN: 978-1305108042
11th edition
Authors: Ronald J. Harshbarger, James J. Reynolds
Posted Date: