Question 1

80,000,000

70,000,000

60,000,000

51,000,000
49,000,000
50,000,000
42,500,000
Axis Title

40,000,000 36,000,000
34,000,000
29,500,000
30,000,000
25,500,000
23,000,000
20,000,000 16,500,000 17,000,000

10,000,000 8,500,000
10,000,000

0
0
0 5,000 10,000 15,000 20,000 25,000 30,000

Axis Title

Make Buy

Question 4
Unit revenue $ 1,700
Fixed cost $ 10,000,000
Marginal cost $ 1,300
Sales Forecast 30,000

Production quantity 30,000

Question 5
Unit revenue $ 1,700
Fixed cost $ 10,000,000
Marginal cost $ 1,300
Sales Forecast 30,000

Production quantity 20,000

Max Production quantity < Break-even point -> Loss -> stop producing
IF the firm still continues to produce then to Minimize Loss, it should produce at 20000 units an
suffer a loss of 2.000.000$
IF the firm stops producing, profit=0

Question 2
Break-even point =Fixed_cost/(Unit_rev-Marginal_cost)
=10000000/(1700-1300)=25000

Question 3

Maximize profit = { 0 if Q=0

-10000000 + 1700Q
if Q>0
Subject to Q ≤ Sales_Forcast
Q ≥ 0
 68,000,000
62,000,000 Units Make
59,500,000
0 10,000,000
55,500,000
51,000,000 5,000 16,500,000
49,000,000
10,000 23,000,000
42,500,000 15,000 29,500,000
36,000,000 20,000 36,000,000
34,000,000
25,000 42,500,000
30,000 49,000,000
35,000 55,500,000
40,000 62,000,000

20,000 25,000 30,000 35,000 40,000

1,300 1,700
Axis Title

e Buy

Total revenue $ 51,000,000

Total Fixed cost $ 10,000,000
Total Variable cost $ 39,000,000
Profit(Loss) $ 2,000,000

Break-even point 25,000

Total revenue $ 34,000,000

Total Fixed cost $ 10,000,000
Total Variable cost $ 26,000,000
Profit(Loss) $ (2,000,000)

Break-even point 25,000

oss -> stop producing
mize Loss, it should produce at 20000 units and
 Buy
0
8,500,000
17,000,000
25,500,000
34,000,000
42,500,000
51,000,000
59,500,000
68,000,000
A.
Unit revenue
Fixed Cost
Marginal Cost
Buy
Sales Forecast

Production Quantity

B.
Unit revenue
Fixed Cost
Marginal Cost
Make
Sales Forecast

Production Quantity

Conclusion
If make under 6666 products => Don't make or buy
If make more than 6666 products and less than 10000 products
If make more than 10000 products => Make
C.
Sales Forecast 30000 (units)
Profit (Buying) (Unit revenue-Marginal Cost).Q-Fixed Cost= 750Q-5000000
Profit (Making) 1000Q-1000000
{█(0 𝑖𝑓 𝑄=0@750𝑄−5000000, 𝑖𝑓 0<𝑄≤200
The mathematical model is:

E.
Break-even point: Profit (Buying)=Profit (Making)
750Q-5000000=1000Q-1000000
→ Q= 20000 (units)
D.
(P) Units Profit(Buying)
10000 2500000
15000 6250000
20000 10000000
25000 13750000
30000 17500000
 35000 21250000
40000 25000000
45000 28750000
50000 32500000

As you can see in the table above, the break-even point is the point that
Q=20000
F.
Because the break-even point is 20000, the company should consider to make prod
 Data Results
2,000 Total Revenue 60,000,000
5,000,000 Total Fixed Cost 5,000,000
1,250 Total Marginal Cost 37,500,000
30,000 Profit (Loss) 17,500,000

30,000 Break-even Point 6,667

Data Results
2,000 Total Revenue 60,000,000
10,000,000 Total Fixed Cost 10,000,000
1,000 Total Marginal Cost 30,000,000
30,000 Profit (Loss) 20,000,000

30,000 Break-even Point 10,000

ducts => Don't make or buy

6 products and less than 10000 products => Buy
00 products => Make

Cost).Q-Fixed Cost= 750Q-5000000

𝑄=0@750𝑄−5000000, 𝑖𝑓 0<𝑄≤20000@1000𝑄−1000000, 𝑖𝑓 20000≤𝑄≤30000)}

P=

Profit(Making) Chart Title

0 45000000
5000000 40000000
10000000 35000000
15000000 30000000
20000000 25000000
20000000
15000000
10000000
5000000
 40000000
35000000
30000000
25000000
25000000 20000000
30000000 15000000
35000000 10000000
40000000
5000000
0
k-even point is the point that 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 55000

Profit(Buying) Profit(Making)

company should consider to make products instead of buying it.

000 45000 50000 55000