Shuzworld needs to decide which would be more economical: reconditioning their existing equipment for this production, buying new equipment, or outsourcing the production to China. Reconditioning which has a fixed cost of $50,000 and included as a variable cost of $1,000 for every 1,000 sneakers produced. By purchasing new equipment it has a fixed cost of $200,000 and a variable cost of $500 for every 1,000 sneakers. By outsourcing production to China they will incurr no fixed costs, and the variable costs will be $3,000 for every 1,000 sneakers that will be produced.
Inputting this data into POM for Windows gives the following results.
A visual representation ...