Samsung Electronics is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A highly used component can be purchased for $49 per unit with delivery promised within a week. Alternatively, Samsung can make the component in-house and have it readily available at a material cost of $22 per unit. The annual leasing cost of the equipment is $34,000 per year. Labor and other operating costs are estimated to be $17,000 per year over the study period. Which one of the following value is closest to the breakeven annual required quantity where make or buy has the same cost?

Samsung Electronics is trying to reduce supply chain risk by making more responsible make-buy decisions through improved cost estimation. A highly used component can be purchased for $49 per unit with delivery promised within a week. Alternatively, Samsung can make the component in-house and have it readily available at a material cost of $22 per unit. The annual leasing cost of the equipment is $34,000 per year. Labor and other operating costs are estimated to be $17,000 per year over the study period. Which one of the following value is closest to the breakeven annual required quantity where make or buy has the same cost?

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...

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