Question: Peach Computer Co outsources the production of motherboards for its

Peach Computer Co. outsources the production of motherboards for its computers. It is currently deciding which of two suppliers to use: Alpha or Beta. Due to differences in the product failure rates in the two companies, 5% of motherboards purchased from Alpha will be inspected and 25% of motherboards purchased from Beta will be inspected. The following data refer to costs associated with Alpha and Beta:


Required
1. What is the relevant cost of purchasing from Alpha and Beta?
2. What factors other than cost should Peachconsider?
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  • CreatedMay 14, 2014
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