A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below: For in-house manufacturing: Annual fixed cost = $75,000 Variable cost per part = $110 For purchasing from supplier: Purchase price per part = $140 For this information, use the Break-Even Excel template to find the best decision if the demand is 7,000. Round your answers to the nearest dollar. Total cost of production: $ ___________ Total cost of outsourcing: $ ___________ The best decision is to ________ (manufacture in house or outsource?). Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use the Excel Goal Seek tool. Round your answer to the nearest whole number. ________ parts
A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below: For in-house manufacturing: Annual fixed cost = $75,000 Variable cost per part = $110 For purchasing from supplier: Purchase price per part = $140 For this information, use the Break-Even Excel template to find the best decision if the demand is 7,000. Round your answers to the nearest dollar. Total cost of production: $ ___________ Total cost of outsourcing: $ ___________ The best decision is to ________ (manufacture in house or outsource?). Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use the Excel Goal Seek tool. Round your answer to the nearest whole number. ________ parts
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below:
For in-house manufacturing:
| Annual fixed cost | = | $75,000 |
| Variable cost per part | = | $110 |
For purchasing from supplier:
| Purchase price per part | = | $140 |
-
For this information, use the Break-Even Excel template to find the best decision if the demand is 7,000. Round your answers to the nearest dollar.
Total cost of production: $ ___________
Total cost of outsourcing: $ ___________The best decision is to ________ (manufacture in house or outsource?).
-
Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it. Use the Excel Goal Seek tool. Round your answer to the nearest whole number.
________ parts
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.