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Intel is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000

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Intel is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Intel can make the component inhouse and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and MARR = 12% per year. Neglect the element of availability a) Determine the breakeven quantity, b) Recommend making or buying at the expected usage level

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