Question: Stanley Inc., has a need for a specific component in there manufacturing process. They has requested bids from three of it's subcontractors. Company A has
Stanley Inc., has a need for a specific component in there manufacturing process. They has requested bids from three of it's subcontractors. Company A has an initial cost of $ and variable costs of $ per unit. Company B has an initial cost of $ and variable costs of $ per unit. Company C has an initial cost of $ and variable costs of $ per unit.
a What are the crossover points? Between A and B
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; A and C
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; and between B and C
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b At what output does Company B become less expensive than Company A
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c At what output does Company C become less expensive than Company B
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d The forecasted amount of components required for the manufacturing process is units, which company should Stanley Inc. choose?
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and what is the cost?
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