Borges Machine Shop, Inc., has a $1-$year contract for the production of $250,000$ gear housings for a new off$-$road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general$-$purpose equipment $($GPE$),$ flexible manufacturing system $($FMS$),$ and expensive, but efficient, dedicated machine $($DM$).$ The cost data follow:

$\backslash$table$[[,\backslash$table$[[$General$-$Purpose$],[$Equipment $($GPE$)]],\backslash$table$[[$Flexible Manufacturing$],[$System $($FMS$)]],\backslash$table$[[$Dedicated$],[$Machine $($DM$)]]],[$Annual contracted units,$250,000,250,000,250,000],[$Annual fixed cost,$$100,000,$$$200,000,$$$525,000$