A manufacturing company is considering outsourcing its distribution operations to a third-party provider. The outsourcing company offers
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A manufacturing company is considering outsourcing its distribution operations to a third-party provider. The outsourcing company offers two pricing plans: Plan P charges a fixed fee of $100,000 per month, and Plan Q charges a variable fee of $0.15 per unit distributed. If the company expects to distribute 400,000 units per month, which plan should it choose to minimize costs?
Related Book For
Operations management in the supply chain decisions and cases
ISBN: 978-0077835439
7th edition
Authors: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
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