Question

In Problem 10, assume the cost factors given have not changed. A marketing representative of NEW-SPEC, a firm that specializes in providing manual inspection processes for other firms, approached Paris Manufacturing and offered to inspect parts for $19 each with no fixed cost. They assured Paris Manufacturing the accuracy and quality of their manual inspections would equal the automated inspection system. Demand for the upcoming year is forecast to be 8,000 units. Should the manufacturer accept the offer?
In Problem 10
Current Manual Inspection System
Annual fixed cost = $35,000
Inspection variable cost per unit = $15 per unit


$1.99
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  • CreatedSeptember 17, 2015
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