A company has purchased one component from its supplier for years. Since the production process of this component is qui

[answerhappygod]

A company has purchased one component from its supplier for
years. Since the production process of this component is quite
simple and involves no capital investment, the Operations Manager
proposes to make this component in house so that the component may
flow gradually into the assembly line for use. The following data
are also given for your comparison and decision making:
To buy
To make
Annual demand
30,000 units
30,000 units
Cost per unit
$9
$10
Fixed cost
$45 per order
$72 per batch
Holding cost (per unit per year)
$2.7
$3.0
Weekly demand*
600 units
600 units
Weekly production*
N/A
800 units
Lead time
5 days
N/A
* Operates 50 weeks a year
Suppose the company decides to continue to buy from the
supplier. In which of the following scenarios will EOQ
decrease?
Group of answer choices
The fixed cost increases from $45 to $72
The cost per unit increases from $9 to $10
The inventory holding cost increases from $2.7 to $3.0
The annual demand increases from 30,000 units to 60,000
units