Windsor Company is currently purchasing a component for $15 but is considering making the part internally. The plant engineer has suggested two alternatives. The first alternative would increase fixed costs by $12,300 per month and incur variable costs of $12 per part. The second alternative would increase fixed costs by $20,900 and incur variable costs of $10 per part.

(b) Over what relevant ranges of volume is each alternative optimal? 1. For demand under units, purchase the part 2. For demand between and units, adopt Alternative 1 3. For demand over units, adopt Alternative 2