Question: OPERATIONS MANAGEMENT ** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS ** ** DO NOT COPY

OPERATIONS MANAGEMENT

** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **

** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **

** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **** DO NOT COPY FROM OTHERS **

OPERATIONS MANAGEMENT ** DO NOT COPY FROM OTHERS

A company is examining the cost of producing an item in-house rather than purchasing it from a 3rd party supplier for $89.95/item. In-house production would require the one-time purchase of equipment of $2100 but the in-house production would cost only $2.45 per item. The demand for the item is a constant 10 items/week where one year is 52 weeks. How many statements are correct? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4 Statement 1. The break-even is 26 weeks. Statement 2. After one week, the savings of the outsource option over in-house is $1225. Statement 3. After three weeks, the lowest cost option is the outsource option. Statement 4. After one year, the savings of the in-house option over outsource is $43400

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