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 entaila variable cost of $17 per unit and an annual fixed cost of $200,000; the other would entaila 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 518 per unit for larger quantities. Vendor C offers a price of $21 per unit for the first 1,000 units and 519 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.) QUESTION 14 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 entaila 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 522 per unit for demand of 1,000 units or less, and $18 per unit for larger quantities. Vendor offers a price of 521 per unit for the first 1,000 units and 519 per unit for additional units, If the manager anticipates an annual volume of no more than 1,000 units, which alternative would be best from a cost standpoint? Internal option Internal options Vendor A Vendor B O Vendor

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!