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Rretrieved from Project Management: A Systems Approach to Planning, Scheduling, and Controlling): Your manufacturing team informs you that they have found a way to increase
Rretrieved from Project Management: A Systems Approach to Planning, Scheduling, and Controlling):
Your manufacturing team informs you that they have found a way to increase the size of the manufacturing run from 10,000 to 18,000 units in increments of 2,000 units. However, the setup cost will be $150,000 and the defects will cost the same $120 for removal and repair.
- Calculate the economic feasibility of make or buy.
- Should the probability of defects change if we produce 18,000 units as opposed to 10,000 units?
- Would your answer to question 1 change if the company management believes that follow-on contracts will be forthcoming? What would happen if the probability of defects changes to 15 percent, 25 percent, 40 percent, 15 percent, and 5 percent due to learning-curve efficiencies?
Your answers must be justified with an explanation
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