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Suppose that a manufacturer can produce a part for $ 1 0 . 0 0 with a fixed cost of $ 3 , 0 0
Suppose that a manufacturer can produce a part for $ with a fixed cost of $ Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $
which includes transportation.
a If the anticipated production volume is units, compute the total cost of manufacturing and the total cost of outsourcing.
b What is the best decision?
a The total cost of manufacturing is $
Simplify your answer.
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