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I need your help! A make-buy decision must be made for a component in a new product. Expected usage is 6,000 units per year, for
I need your help!
A make-buy decision must be made for a component in a new product. Expected usage is 6,000 units per year, for a study period of 8 years. The component can be purchased from a supplier for $C = 22 per unit, with delivery promised within a week. Alternatively, the component can be made in-house and be readily available, at a cost of $U = 5 per unit, if equipment costing $P = 148, 409 is purchased. Labor and other operating costs are estimated to be $O = 34, 071 per year. Salvage is estimated at 15% of the first cost. The MARR is 8% per year Neglect the element of availability. What is the break-even quantity for deciding whether to make or buy this component? A make-buy decision must be made for a component in a new product. Expected usage is 6,000 units per year, for a study period of 8 years. The component can be purchased from a supplier for $C = 22 per unit, with delivery promised within a week. Alternatively, the component can be made in-house and be readily available, at a cost of $U = 5 per unit, if equipment costing $P = 148, 409 is purchased. Labor and other operating costs are estimated to be $O = 34, 071 per year. Salvage is estimated at 15% of the first cost. The MARR is 8% per year Neglect the element of availability. What is the break-even quantity for deciding whether to make or buy this component
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