A metal manufacturing company aims to enhance its profit by increasing its manufacturing capacity. Therefore, the company contacts Vendor X and Vendor Y, who sell Pressing Machine X, and Pressing Machine Y, respectively. The following information is collected regarding the pressing machines: Machine X has annual fixed costs of $32,750, and its variable cost is $12/unit. The other machine (Machine Y) has a lower annual fixed cost (i.e., $24,750), while its variable cost is more expensive (i.e., $14/unit).

The metal manufacturing company estimates that the demand is 4000 units annually, and each unit can be sold for $15. If you were hired to assist this company in making a decision, which vendor would you recommend to maximize the company's profit? Why?

Answer rating: 100% (QA)

To determine which vendor to recommend to maximize the companys profit we can calculate the tota... View the full answer