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Determine the maximum number of shipments per year

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Question - Ross Manufacturing in Atlanta is considering outsourcing a component from an offshore company. The company has collected the following data to make an economic decision.

Cost to make it in-house = $96 per unit.

Annual Demand = 500,000 units

Price quoted by the Asian company = $90 per unit plus a shipping cost of $20,000 per shipment.

Required - Determine the maximum number of shipments per year that the company can require the supplier to make in order to justify outsourcing.

Reference no: EM132634724

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