The ABC Company had two options for sourcing molded plastic? parts, and these options are presented in the table below.? Now, the ABC Company has identified another potential supplier for the molded plastic parts. The new supplier has bid ?$0.1300 per part but also will impose a shipping and handling charge of ?$0.0100 per unit. Additional inventory handling charges should amount to ?$0.0040 per unit.? Finally, purchasing costs are estimated at ?$10 per month for the length of the?36-month contract. Note that the forecasted demand is a total of 1 million units over the 36 months.

b. Suppose the? three-year volume is expected to rise to 1.5? million, rather than 1? million, molded plastic parts.

The total cost per unit associated with insourcing is now :