The annual demand for an item that can be either purchased or produced is 3000 units. Costs
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Should the item be manufactured or purchased? What is the optimum lot size for the least cost alternative?
Transcribed Image Text:
Purchase Produced Item cost Purchase cost per 54.00 $15.00 $3.50 purchase Set-up cost per set up Holding cost per item $150 125 $1.25 10,000 per year Production rate per year
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Option A Purchase C T 10000 items850item ...View the full answer
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Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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