The annual demand for a specific component is r2500 it can, Ask an Expert

Management Studies

The annual demand for a specific component is R2500. It can be purchased at a cost of R25 each with a cost of R5 per order. An alternative is to manufacture it, in which case 10000 units can be produced annually at a set up of R50 per run and a unit cost of R22. The inventory holding cost is 10% of unit cost. Advise the inventory manager on whether to buy or manufacture this item.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91630716

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