Samsung Electronics is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Samsung can make the component inhouse and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and MARR is 12% per year. Neglect the element of availability (a) to determine the breakeven quantity, and (b) to recommend making or buying at the expected usage level. Solve manually please, no Excel <3
Samsung Electronics is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Samsung can make the component inhouse and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and MARR is 12% per year. Neglect the element of availability (a) to determine the breakeven quantity, and (b) to recommend making or buying at the expected usage level. Solve manually please, no Excel <3
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 2PA: Syntech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and...
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Samsung Electronics is trying to reduce supply chain risk by making more responsible make/buy decisions through improved cost estimation. A high-use component (expected usage is 5000 units per year) can be purchased for $25 per unit with delivery promised within a week. Alternatively, Samsung can make the component inhouse and have it readily available at a cost of $5 per unit, if equipment costing $150,000 is purchased. Labor and other operating costs are estimated to be $35,000 per year over the study period of 5 years. Salvage is estimated at 10% of first cost and MARR is 12% per year. Neglect the element of availability (a) to determine the breakeven quantity, and (b) to recommend making or buying at the expected usage level. Solve manually please, no Excel <3 |
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