$1)$ Using Table $1$ in the case duplicate the sensitivity analysis of the production points for the three options considered in the case by management: $1)$ Build an entire new production facility that would enable GEI to produce all of the products it needed, $2)$ Outsource production to build partners, $3)$ Expand the existing GEI facility to increase production. Construct these in a spreadsheet resembling the following $($start with $100$ units and increment the units upward by $100$ units until you have calculated it to $30,000$ units:

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|\}$

$\backslash$hline & $\backslash$begin$\{$tabular$\}\{$c$\}$

Option $1\backslash \backslash$

New location $\backslash \backslash$

Fixed costs $\backslash \backslash$

Variable cost

$\backslash$end$\{$tabular$\}$ & $\backslash$begin$\{$tabular$\}\{$c$\}$

Option $2\backslash \backslash$

Subcontract $\backslash \backslash$

$\backslash (\backslash$$ $4,000,000\mathrm{.}00\backslash )\backslash \backslash$

$\backslash (\backslash$$ $55\mathrm{.}00\backslash )$

$\backslash$end$\{$tabular$\}$ & $\backslash$begin$\{$tabular$\}\{$c$\}$

Option $3\backslash \backslash$

Expand $\backslash \backslash$

$\backslash (\backslash$$ $255\mathrm{.}00\backslash )$

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

$2)$ Review the spreadsheet created above as a group and identify the production points where each option is attractive. Draw a chart $($by hand or with spreadsheet software$)$ showing the total cost lines of the three options. Plot total cost on the Y $-$axis and units of production on the X $-$axis for the three options. Identify the option that makes the most financial sense for the firm for $12,000,13,000$ and $28,000$ units. THE SENSITIVITY ANALYSIS

Doug Smith reported to the main GEI conference room for the next weeks meeting. He was happy to see everyone already there. Alan provided Doug with a list of options that had been discussed during the week. There were three options discussed and they are shown in Figure $1.$

Figure $1.$ Analysis of manufacturing options

Although the cost of the new facility was staggering and both Alan and Doug were concerned about it they realized that with enough demand for the product the new factory would be the way to go$.$ Doug looked at the breakeven charts that Allan had provided and he could clearly see the sales numbers that were needed to justify the new facility. The only question now was if such demand could materialize to justify the expense.