2. A company is using a part in the production.Currently, the company is purchasing this part from a supplier at acost of $10 for each unit but the supplier offers a price of $8 foreach unit if the order quantity 1000 or more units. The orderingcost is $50 per order. Company uses 5000 units of this itemannually. Holding cost rate is 20%. On the other hand, the companycan also have the possibility of producing this part with aproduction rate of 25 units per day. The setup cost is $30 andproduction cost is $9 per unit. Consider that the company
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