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

A manager is trying to decide whether to purchase

A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use eith of two processes. One would entail a variable cost of $14 per unit and an annual fixed cost of $280,000; the other would entail a variable cost of $17 per unit and an annual fixed cost of $219,000. Three vendors are willing to provide the part. Vendor A has a price of $19 per unit for any annual quantity up to 32,000 units. Vendor B has a price of $22 per unit if demand is 1,000 units or less, but $ per unit (for all units) if demand is greater. Vendor C offers a price of $21 per unit for the first 1,000 units, and $19 per unit for addition units. a-1. If the manager anticipates an annual demand of 15,000 units, which alternative would be best from a cost standpoint? Vendor A Vendor B Vendor C Internal 1 Internal 2 a-2. If the manager anticipates an annual demand of 70,000 units, which alternative would be best from a cost standpoint? Vendor A and Internal 1 Vendor B and Internal 2 Vendor C and Internal 1 Vendor C and Internal 2 A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use eith of two processes. One would entail a variable cost of $14 per unit and an annual fixed cost of $280,000; the other would entail a variable cost of $17 per unit and an annual fixed cost of $219,000. Three vendors are willing to provide the part. Vendor A has a price of $19 per unit for any annual quantity up to 32,000 units. Vendor B has a price of $22 per unit if demand is 1,000 units or less, but $ per unit (for all units) if demand is greater. Vendor C offers a price of $21 per unit for the first 1,000 units, and $19 per unit for addition units. a-1. If the manager anticipates an annual demand of 15,000 units, which alternative would be best from a cost standpoint? Vendor A Vendor B Vendor C Internal 1 Internal 2 a-2. If the manager anticipates an annual demand of 70,000 units, which alternative would be best from a cost standpoint? Vendor A and Internal 1 Vendor B and Internal 2 Vendor C and Internal 1 Vendor C and Internal 2

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