Engineering, 11.07.2019 01:20, fake7667

Acompany receives an order to make 3 million identical machined parts. they buy the required tooling, which costs $500,000. each part requires $0.40 for material and $0.15 for labor. the indirect costs are 2.5 times the labor costs. halfway through the production run (1.5 million parts remaining), a new manufacturing method is devised that will reduce the material cost to $0.34 per part and will reduce the labor cost to $0.10 per part. this process will require $100,000 for additional tooling. should the company switch to the new method?

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Acompany receives an order to make 3 million identical machined parts. they buy the required tooling...