Suppose that a manufacturer can produce a part for $11.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation. a. If the anticipated production volume is 1,400 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision?

Suppose that a manufacturer can produce a part for $11.00 with a fixed cost of $6,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $12.00, which includes transportation. a. If the anticipated production volume is 1,400 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision?

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Part 1

Suppose that a manufacturer can produce a part for

$11.00

with a fixed cost of

$6,000.

Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of

$12.00,

which includes transportation.

a. If the anticipated production volume is

1,400

units, compute the total cost of manufacturing and the total cost of outsourcing.

b. What is the best decision?

Question content area bottom

Part 1

a. The total cost of manufacturing is

(Simplify your answer.)

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