Stan fawcetts company is considering producing a gear, Ask an Expert

Management Studies

Q. Stan fawcetts company is considering producing a gear assembly that it now purchases from salt lake supply, inc. salt lake supply charges $4 per unit with a minimum order of 3000 units. Stan estimates that it will cost 15,000 to set up the process and then 1.82 per unit for labour and materials.

A. Draw a graph illustrating the crossover (or indifference) point

B. Decide the number of units where either choice has the same cost

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