Question: A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two

A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of two processes. One would entail a variable cost of $15 per unit and an annual fixed cost of $203,000; the other would entail a variable cost of $12 per unit and an annual fixed cost of $260,000. Three vendors are willing to provide the part. Vendor A has a price of $19 per unit for any annual quantity up to 28,000 units. Vendor B has a price of $21 per unit if demand is 1,000 units or less, but $16 per unit (for all units) if demand is greater. Vendor C offers a price of $20 per unit for the first 1,000 units, and $18 per unit for additional units. a-1. If the manager anticipates an annual demand of 15,000 units, which alternative would be best from a cost standpoint? multiple choice 1 Vendor A Vendor B Vendor C Internal 1 Internal 2 a-2. If the manager anticipates an annual demand of 65,000 units, which alternative would be best from a cost standpoint? multiple choice 2 Vendor A and Internal 1 Vendor B and Internal 1 Vendor C and Internal 1 Vendor C and Internal 2 Vendor B and Internal 2 b-1. Determine the range for which each alternative is best? Range Optimal Choice 1 to 1000 (Click to select) 1,001 to 65,000 (Click to select) 65,000 or more (Click to select) b-2. Are there any alternatives that are never best, If so, which ones? multiple choice 6 Internal 2 and Vendor B are never best. Internal 1 and Vendor C are never best. Internal 1 and Vendor A are never best.

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