[Solved] A manufacturer has identified the options for acquiring a machined part. It can make the part on a numerically controlled lathe for $150 per unit

A manufacturer has identified the options for acquiring a machined part. It can make the part on a numerically controlled lathe for $150 per unit (including materials.) It can make the part on a standard lathe for $250 per unit (also including materials.) It can make the part on a machining center for $50 per unit (also including materials.) The manufacturer can acquire a standard lathe for $10,000. It could acquire a numerically controlled lathe for $100,000. A machining center would cost $350,000. It has also found that it can purchase the part for $350 per unit. Advise the manufacture as to which option is best for him and under what conditions?

Expert Answer

---

Answer to A manufacturer has identified the options for acquiring a machined part. It can make the part on a numerically controlled lathe for $150 per unit…..