A las vegas nevada manufacturer has the option to make or, Ask an Expert

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A Las Vegas, Nevada, manufacturer has the option to make or buy one of its components parts. The annual requirement is 10,000 units. To make the parts in-house,the firm must invest $30,000 in capital equipment and estimates that the parts cost $6 each. The firm estimates that it costs $1,000 to prepare the contract with supplier.

Assume that a supplier is able to supply the parts for $10 each

A) What is the break-even quantity?

B) What is the total cost at break-even point?

Assume that the firm can negotiate a contract to buy 10,000 units of its components parts from a supplier

C) what is the maximum purchase price (i.e unit price) that the firm should negotiate with the supplier?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93128348

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