A firm plans to begin production of a new small appliance. The manager must decide whether to purchase the motors for the appliance from a vendor for $6.70 each or to produce them in house. There are two in house options.
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Option 1 would have an annual fixed cost of $161000 and a variable cost of $5.90.
Option 2 would have an annual fixed cost of $194000 and a variable cost of $4.10.
Calculate the maximum quantity that would have the manager select purchasing the motors from the vendor. Get Operations Management homework help today