You have two alternatives to consider to produce a part. The first alternative requires an initial investment of $50,000, produc
tion costs are $30 per part and they can be sold for $50. The second alternative is that you can buy the part externally for $40 and they still sell for $50.a. Make and explain your recommendation for these two alternatives showing your calculations and the graph you would show to management.b. What are two make-buy issues of which management should be aware?
1 answer:
Answer:
At 5,000 both option has the same cost.
Below that volume is better to but
and above this, produce the part generates a cost savings.
Explanation:
there is a point of indifference at which potal cost for both option is the same.
50,000 + 30X = 40X
X = 50,000 / 10 = 5,000
At this pouint the total cost is the same for both alternatives
Therefore the company will have to check for which is their relevant range
in order to decide whether to produce or buy the part.
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Answer:
0.0084
Explanation:
For this probability problem, we will have to make use of the normal probability distribution table.
to use the table, we will have to compute a certain value
z = (x- mean) /Standard deviation
z = = 2.39
Probability he has worked in the store for over 10 years can be obtained by taking the z value of 2.39 to the normal probability distribution table to read off the values.
<em>To do this, on the "z" column, we scan down the value 2.3. we then trace that row until we reach the value under the ".09" column. </em>
This gives us 0.99916
Thus we have P (Z < 2.39) = 0.9916
We subtract the value obtained from the table from 1 to get the probability required.
1 - 0.9916 = 0.0084
The Probability that the employee has worked at the store for over 10 years = 0.0084