{"id":6792,"date":"2021-10-10T18:56:57","date_gmt":"2021-10-10T18:56:57","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/1-using-expected-value-is-it-economically-better-to-make-or-buy-the\/"},"modified":"2021-10-10T18:56:57","modified_gmt":"2021-10-10T18:56:57","slug":"1-using-expected-value-is-it-economically-better-to-make-or-buy-the","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/1-using-expected-value-is-it-economically-better-to-make-or-buy-the\/","title":{"rendered":"1.using expected value, is it economically better to make or buy the"},"content":{"rendered":"<div>\n<p>\u00a0\u00a0\u00a01) APA format<\/p>\n<p>2)add references at end \u00a0<\/p>\n<p>Teloxy Engineering has received a one-time contract to design and build 10,000 units of a new product. During the proposal process, management felt that the new product could be designed and manufactured at a low cost. One of the ingredients necessary to build the product was a small component that could be purchased for $60 in the marketplace, including quantity dis- counts. Accordingly, management budgeted $650,000 for the purchasing and handling of 10,000 components plus scrap.\u00a0<\/p>\n<p>During the design stage, your engineering team informs you that the final design will require a somewhat higher-grade component that sells for $72 with quantity discounts. The new price is substantially higher than you had budgeted for. This will create a cost overrun.\u00a0<\/p>\n<p>You meet with your manufacturing team to see if they can manufacture the component at a cheaper price than buying it from the outside. Your manufacturing team informs you that they can produce a maximum of 10,000 units, just enough to fulfill your contract. The setup cost will be $100,000 and the raw material cost is $40 per component. Since Teloxy has never manu- factured this product before, manufacturing expects the following defects:\u00a0<\/p>\n<p>Percent defective 0 10 20 30 40 Probability of 10 20 30 25 15\u00a0<\/p>\n<p>occurrence<br \/>All defective parts must be removed and repaired at a cost of $120 per part.\u00a0<\/p>\n<ol>\n<li>Using expected value, is it economically better to make or buy the component? <br \/>\u00a0<\/li>\n<li>Strategically thinking, why might management opt for other than the most economical <br \/>choice? <br \/>\u00a0<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0\u00a0\u00a01) APA format 2)add references at end \u00a0 Teloxy Engineering has received a one-time contract to design and build 10,000 units of a new product. During the proposal process, management felt that the new product could be designed and manufactured at a low cost. One of the ingredients necessary to build the product was a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-6792","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/6792","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=6792"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/6792\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=6792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=6792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=6792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}