Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
Homework Questions Math/Business?
Insourcing incurs an annual fixed cost of 30,000 and a variable cost of 60 per unit. Outsourcing incurs annual fixed Cost of 50,000 and a variable cost of $20 per unit. Using the make or buy analysis what is the indifference point between the two alternatives? For the scenario anticipated demand is then forecast to be 300 units. Which option, in source or outsource would be most appropriate ?
Show all stages of this analysis
1 Answer
- ?Lv 79 months ago
what is the indifference point between the two alternatives?
Make ≤ Buy
30000 + 60x ≤ 50000 + 20x
Subtract 20x from both sides
30000 + 40x ≤ 50000
Subtract 30000 from both sides
40x ≤ 20000
Divide both sides by 40
x ≤ 500
500 <––––––
----------------------
make will be cheaper than buy for anything less than 500
300 units should be in sourced <–––––
