Borges Machine Shop, Inc., has a $1-$year contract for the production of $200,000$ gear housings for a new off$-$road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general$-$purpose equipment $($GPE$),$ flexible manufacturing system $($FMS$),$ and expensive, but efficient, dedicated machine $($DM$).$ The cost data follow:Annual contracted unitsAnnual fixed costPer unit variable costGeneral$-$PurposeEquipment $($GPE$)200\mathrm{.}000$$$150,000$$$15\mathrm{.}00$If the contract for the second and third years is pending, for demand below $75,000$ units, optionFor demand above $255,000$ units, optionis the best alternative for Luis.Flexible ManufacturingSystem $($FMS$)200,000$$$225,000$$$14\mathrm{.}00$is the best alternative for Luis.DedicatedMachine $($DM$)200,000$$$480,000$$$13\mathrm{.}00$