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

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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. If the lead time increases from 5 days to 10 days, the
economic order quantity will
Group of answer choices
Increase by a factor of √2
Remain the same
Decrease by a factor of √2
Increase by a factor of 2
Increase by a factor of 4