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

Answer rating: 100% (QA)

cost of purchase 25 EOQ2300042512 EOQ98 Total cost 3000253000984 TOTAL COST 7... View the full answer