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At a volume of 15,000 units, the Carter Manufacturing Company should use the current method they have now because it costs them $1250 more using the newer method at this volume of units.
A.9) Based on expected value, the choice that offers the greatest gain is the Batch manufacturing because this choice has a gain of $1,000,000, where the other choices of custom manufacturing and group technology only have gains of $500,000 and $250,000, respectively. The amount that Chen Chung should be willing to pay for a forecast that would accurately determine the level of demand in the future would be $250,000, because at this amount he would still break even if he chose the least amount of gain of the three choices...
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