Question

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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