What should the company do regarding this product purchase


A company has the following product information:

                        Buy Product                  Produce Semi-Automated                      Produce Fully Automated

Fixed cost             -------                        $150,000                                           $200,000

Variable cost       $20.00                       $18.00                                                $15.00

What should the company do regarding this product, purchase, produce semi-automated or produce fully automated?

At what volume would the company be indifferent to buying the product or producing it semi-automated?

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Operation Management: What should the company do regarding this product purchase
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