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

 Problem 5. A manager is trying to decide whether to purchase

Problem 5. 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 $20,000, the other would entail a variable cost of $14 per unit and an annual fixed cost of $24,000. The vendor is willing to offer a price of $20 per unit. Determine the range for which each alternative is best (at the minimum cost)? Please provide the range of optimality

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