1. Your corporation received orders from your customer, MMS, to supply AK49. As a purchasing manager,...

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1. Your corporation received orders from your customer, MMS, to supply AK49. As a purchasing manager, you contacted a reliable manufacture and supplier that agreed to sell you the product, AK49 @ $150 per unit. You also contacted your accounting department that furnished the following information on in-house manufacturing of AK49: Direct material: $54 per unit Direct labor: $36 per unit Overhead and other fixed cost: $90,000 a. Write cost functions for purchasing AK49 and for manufacturing in-house. (10) b. Calculate algebraically the point of intersection of the two cost functions. (5) c. Plot the two cost functions on a graph paper. Use an appropriate scale to show that the two cost functions intersect. (10+15) d. For what range of orders would you recommend to make AK49 in house and for what range of orders would you purchase? (10) 2. As a purchasing manager, you are required to purchase internet service for your corporation. You have short-listed two suppliers: Goofey and Snoopy. And their charges are as follows: Goofey: A minimum of $1,000 for up to 12,000 minutes $1,000 plus 7 cents per minute for above 12,000 minutes of usage Snoopy: There is no minimum charge and charges are 8 cents per minute. a. Write the two cost functions. (10) b. Calculate algebraically the point of intersection of the two cost functions. (5) c. Plot the two cost functions on a graph paper. (10 + 15) d. Over what range of usage would you select Goofey or Snoopy. (10) 1. Your corporation received orders from your customer, MMS, to supply AK49. As a purchasing manager, you contacted a reliable manufacture and supplier that agreed to sell you the product, AK49 @ $150 per unit. You also contacted your accounting department that furnished the following information on in-house manufacturing of AK49: Direct material: $54 per unit Direct labor: $36 per unit Overhead and other fixed cost: $90,000 a. Write cost functions for purchasing AK49 and for manufacturing in-house. (10) b. Calculate algebraically the point of intersection of the two cost functions. (5) c. Plot the two cost functions on a graph paper. Use an appropriate scale to show that the two cost functions intersect. (10+15) d. For what range of orders would you recommend to make AK49 in house and for what range of orders would you purchase? (10) 2. As a purchasing manager, you are required to purchase internet service for your corporation. You have short-listed two suppliers: Goofey and Snoopy. And their charges are as follows: Goofey: A minimum of $1,000 for up to 12,000 minutes $1,000 plus 7 cents per minute for above 12,000 minutes of usage Snoopy: There is no minimum charge and charges are 8 cents per minute. a. Write the two cost functions. (10) b. Calculate algebraically the point of intersection of the two cost functions. (5) c. Plot the two cost functions on a graph paper. (10 + 15) d. Over what range of usage would you select Goofey or Snoopy. (10)

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1 Cost functions for purchasing and manufacturing AK49 Purchasing cost function Cp 150Q where Cp is the total purchasing cost Q is the quantity of AK4... View the full answer