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Jubail Oil and Gas is deciding to manufacture CNG cylinder in their own facility in Jubail, while the same cylinders were purchased from Saudia Engineering

Jubail Oil and Gas is deciding to manufacture CNG cylinder in their own facility in Jubail, while the same cylinders were purchased from Saudia Engineering located in Riyadh. Saudia Engineering offered the cylinders at a price of 40 SAR per unit which included the production and transportation cost for a minimum order to 2000 cylinders. As the demand was increasing Jubail Oil and Gas estimated that the cost of manufacturing in their own facility in Jubail would incur a fixed cost of 45,000 SAR and a variable cost of 25 SAR to meet the demand.
a. Determine the range of quantity that is economical either to purchase from Saudia Engineering or produce at their own location in Jubail facility.
b. Illustrate the crossover point using a graph.
c. What is your decision, either to purchase from Riyadh or produce at their Jubail location for a quantity of 2500, and 4750 cylinders?

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