Connect Online Access for Operations Management
14th Edition
ISBN: 9781260242355
Author: William J. Stevenson
Publisher: Mcgraw-hill Higher Education (us)
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Textbook Question
Chapter 5, Problem 8P
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $17 per unit and an annual fixed cost of $200,000; the other would entail a variable cost of $14 per unit and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volune up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor C offers a price of $21 per unit for the first 1,000 units, and $19 per unit for additional units.
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Chapter 5 Solutions
Connect Online Access for Operations Management
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