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:

Conformity

The act of aligning one's beliefs, attitudes, and behaviors with those of a group or societal norms.

Status

pertains to the relative social, professional, or other standing of someone or something.

Groupthink

A psychological phenomenon within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Group Members

Individuals who are part of a specific collection or assembly, sharing common goals, interests, or purposes within the group.