Demand and Cost Inputs

Make Costs

The make option has a fixed cost and a variable cost per unit.

highlighted = computed this step

Make Fixed Cost

Making has fixed cost 200.

make fixed cost=200\text{make fixed cost}=200
Cost inputsThe comparison starts with deterministic demand and per-unit costs.make-or-buy inputsvaluedemand100make fixed200make variable3buy price6

Make Variable Cost

Making also costs 3 per unit.

make variable cost=3\text{make variable cost}=3
Make-or-buy comparisonThe chart recomputes base costs, break-even demand, and the what-if.make-or-buy cost comparisonmake 500; buy 600; winner makemeasurevaluemeaningdemand100unitsfixed cost200make optionvariable cost3per unitbuy price6per unitbreak-even demand200/3make equals buymakemake 500buybuy 600what-if makewhat-if make 350what-if buywhat-if buy 300base winner make by 100; what-if winner buy by 50