Question

Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc., at $4.00 per unit with a minimum order of 3,000 units. Stan is considering instead producing the gear assembly himself. He estimates that producing it himself will cost $12,000 to set up the process and then $1.82 per unit for labor and materials 40.000- iMinimum Order 38,000 32,000- a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of purchasing from Salt Lake Supply. Total cost for the purchase option is already plotted. Properly label your line 28,000 24.000 20,000 Note: Carefully follow the instructions above and only draw the required object 16.000- 12,000 8,000- 4,000- 0- 0 6.000 2,000 4,000 8,000 Quantity soo

Answer 1

A B C Purchase -A2*4 Produce 1 Quantity - 12000+1.82*A2 12000+1.82*A3 12000+1.82*A4 - 12000+1.82 A5 12000+1.82*A6 - 12000+1.82 A7 12000+1.82*A8 - 12000+1.82*A9 - 12000+1.82*A10 |=12000+1.82*A11 2 3000 3 4000 -A3*4 4 5000 -A4*4 5 6000 -A5*4 -A6*4 -A7*4 6 7000 7 8000 -A8*4 8 9000 9 10000 10 11000 -A9*4 -A10 4 -A11*4 11 12000 12

B D 1 Quantity Purchase Produce 2 3000 12000 17460 3 4000 16000 19280 4 5000 20000 21100 5 6000 24000 22920 7000 28000 24740 7 8000 32000 26560 9000 36000 28380 10000 40000 30200 10 11000 44000 32020 11 12000 48000 33840 12 13 cn

60000 50000 40000 30000 20000 10000 C 12000 3000 4000 5000 6000 7000 8000 9000 10000 11000 Purchase Produce