Scenario 2.6 You Currently Purchase a Part Used in Your Production Process

question 93

Multiple Choice

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier, and have decided to begin making this part in-house. You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment. Cost information for these two options is as follows:

-Use Scenario 2.6 to solve this riddle. For what range of output is the General-Purpose Equipment the low-cost option?

• A) 0-30,000 units per year
• B) 30,000 or more units per year
• C) 40,000 or more units per year
• D) 0-40,000 units per year

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Definitions:

Personal Preference

An individual's inclination or liking for specific choices or options over others.

Social Consensus

The degree of agreement among members of a society or group on beliefs, behaviors, or values.

Public Agreement

A consensus or accord reached openly among the general populace or within a specific group.

Hedonistic Principle

The idea that individuals seek pleasure and avoid pain, guiding much of human behavior and decision-making.