Question: A company has the option of purchasing a good or manufacturing the item. If the item is purchased, the company will be charged $25 per

A company has the option of purchasing a good or manufacturing the item. If the item is purchased, the company will be charged $25 per unit plus a cost of $4 per order. If the company manufactures the item, it has a production capacity of 8,000 units per year. It costs $50 to set up a production run, and annual demand is 3,000 units per year. If the annual holding cost is 10% and the cost of manufacturing one unit is $23, determine whether the company should purchase or manufacture the item

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