Question: Chapter 5, Problem 8 A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could

Chapter 5, Problem 8 A manager is trying to
Chapter 5, Problem 8 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 $17 per unit and an annual fixed cost of $200,000; the other would entail a variable cost of $14 per unit and an annual fixed cost of $240,000. Three vendors are willing to provide the part. Vendor A has a price of $20 per unit for any volume up to 30,000 units. Vendor B has a price of $22 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor C offers a price of $21 per unit for the first 1,000 units and $19 per unit for additional units. For the two internal making plans, at what volume, the cost of these two options will be the same? (If the result is not an integer, please round the result to nearest integer.)

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