A Manufacturer Is Contemplating a Switch from Buying to Producing

question 117

Multiple Choice

A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost. The production rate would be about double the usage rate. Compared to the EOQ, the economic production quantity would be approximately

• A)the same.
• B)20 percent larger.
• C)40 percent larger.
• D)20 percent smaller.
• E)40 percent smaller.

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Definitions:

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