1.information for one customer?

1.information for one customer?

Base Case: Perceived benefits = $50 and Price = $10.00

Improvement Option A: Perceived benefits = $ 65 and Price = $13.00

Improvement Option B: Perceived benefits = $ 65 and Price = $12.50

Improvement Option A: Perceived benefits = $ 60 and Price = $12.50

7.A firm is evaluating the alternative of manufacturing a part that is currently being outsourced from a supplier.

The relevant information is as follows: For in house manufacturing:

Annual fixed cost = $100,000

What is the best way to increase value the most given the following

Variable cost per part = $140

For purchasing from supplier:

Purchase price per part = $160

a)Using this information, find the best decision if the demand is 4,000

b)Determine the break-even quantity for which the firm would be indifferent between manufacturing the part in-house or outsourcing it.

8. Refer to the information provided in question 7 to answer the following: 

a)If demand is forecast to be 5,500 parts, should the firm make the part in house or purchase it from a supplier?

b)The marketing department forecasts that the upcoming year’s demand will be 5,500 parts. A new supplier offers to make the parts for $158 each. Should the company accept the offer? If so, how much can they save?

c)What is the maximum price per part the manufacturer should be willing to pay to the supplier if the forecast is 5,500 parts, using the information in the original problem (question 7)?

9. A university currently has a recycling program for paper waste. The fixed cost of running this program is $10,000 per year. The variable cost for picking up and disposing of each ton of recyclable paper is $40. If the work is outsourced to a recycling company, the cost would be $65 per ton.

a)If the forecasted demand is 275 tons, what should the university do?

b)Find the break-even point

c)If the university recycles 200 tons each year, what should it do?