The annual demand for an item that can be either purchased or produced is 3000 units. Costs

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The annual demand for an item that can be either purchased or produced is 3000 units. Costs associated with each alternative are as follows:

Should the item be manufactured or purchased? What is the optimum lot size for the least cost alternative?

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Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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Question Posted: May 17, 2016 05:45 AM

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The annual demand for an item that can be either purchased or produced is 3000 units. Costs

Question:

Purchase Produced Item cost Purchase cost per 54.00 $15.00 $3.50 purchase Set-up cost per set up Holding cost per item $150 125 $1.25 10,000 per year Production rate per year

Step by Step Answer:

Option A Purchase C T 10000 items850item ...View the full answer

Engineering Economy

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