A Manufacturer Is Contemplating a Switch from Buying to Producing

question 129

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 maximum inventory would be approximately

• A)70 percent higher.
• B)30 percent higher.
• C)the same.
• D)30 percent lower.
• E)70 percent lower.

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