Teloxy Engineering $($B$)$

Your manufacturing team informs you that they have found a way to increase the stre of the manufacturing run from $10,000$ to $18,000$ units, in increments of $2\mathrm{.}000$ units. However, the setup cost will be $$150,000$ and defects will cost the same SI$20$ for removal and repair.

QUESTIONS

Calculate the economic feasibility of make or buy.

Should the probability of defects change if we produce $18,000$ units as opposed to $10,000$ units?

Would your answer to question $1$ change if Teloxy management belleves that follow$-$on contracts will be forthcoming? What would happen If the probability of defects changes to $15$ percent, $25$ percent, $40$ percent, $15$ percent. and $5$ percent due to learning$-$curve efficlencies?