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Suppose that a manufacturer can produce a part for ?$12.00 with a fixed cost of ?$4,000. ?Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of ?$16.00?, which includes transportation.
a. If the anticipated production volume is 1,400 ?units, compute the total cost of manufacturing and the total cost of outsourcing.
b. What is the best? decision?
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