Suppose that a manufacturer can produce a part for $12.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in
Suppose that a manufacturer can produce a part for $12.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $14, which includes transportation.
a. If the anticipated production volume is 1,200 units, compute the total cost of manufacturing and the total cost of outsourcing.
b. What is the best decision?
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Authors: William Brueggeman, Jeffrey Fisher
17th Edition
1264072945, 978-1264072941
