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: Flexible General Purpose Dedicated Manufacturing Equipment (GPE) Machine System 200,000 200,000 200,000 $ 100,000 $ 200,000 $ 500,000 $ 15 $ 14 $ 13 Annual Contacted Units Annual Fixed Cost Per Unit Variable Cost 1) Which process is best for this contract? Explain 2) What is the economical volume for each process (at what volume is each process the cheapest alternative?)