A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its new fax machine production. The company expects to produce 9,000 units per year. The following estimates have been made:
a.What is the annual cost to make the roller gear assembly in-house?
b.What is the annual cost to buy the roller gear assembly?
c.At what volume are they indifferent regarding the decision to make or buy?

Question

A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its new fax machine production. The company expects to produce 9,000 units per year. The following estimates have been made:  
a.What is the annual cost to make the roller gear assembly in-house?
b.What is the annual cost to buy the roller gear assembly?
c.At what volume are they indifferent regarding the decision to make or buy?

Quizplus · Accepted Answer

The Answer of A manufacturing company needs to know whether to make in-house or buy a roller gear assembly for its new fax machine production. The company expects to produce 9,000 units per year. The following estimates have been made:  
a.What is the annual cost to make the roller gear assembly in-house?
b.What is the annual cost to buy the roller gear assembly?
c.At what volume are they indifferent regarding the decision to make or buy?

A Manufacturing Company Needs to Know Whether to Make In-House