The GATE Grind

GATE 2025 PI – Question 32

Operations Research and Operations Management · Engineering Economy and Costing · 1 mark · Numerical answer

A toy company can make batteries with annual fixed cost ₹2,00,000 and variable cost ₹70/unit, or buy at ₹90/unit. Find annual demand at the make-or-buy switching point (integer batteries).

Practise this question in The GATE Grind →

Show answer and explanation

Correct answer: 9995 to 10005

Explanation

Equate costs: $200000+70Q=90Q$. Thus $20Q=200000$ and **Q = 10000 batteries**. Above this demand, making has lower total cost.

More Engineering Economy and Costing questions

All Engineering Economy and Costing questions →