A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a

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A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier. The relevant information is provided below:

For in-house manufacturing:

Annual fixed cost = $80,000

Variable cost per part = $140

For purchasing from supplier:

Purchase price per part = $160

a. Using this information, find the best decision if the demand is 5,000.

b. Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it?

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OM6 operations supply chain management

ISBN: 978-1305664791

6th edition

Authors: David Alan Collier, James R. Evans

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Question Posted: Apr 06, 2017 11:24 AM

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A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a

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a Production volume 5000 Produced InHouse Fixed cost 8000000 Unit variable cost 14000 Outso...View the full answer

OM6 operations supply chain management

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