To model a situation where a setup cost will be charged if a certain product is produced, the best approach is to include and Excel "IF" function.

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The best approach would be to use the Excel "IF" function in combination with the cost of production and the threshold quantity (the quantity at which a setup cost would be charged). For example, the formula could be: IF(quantity<threshold quantity, cost of production, cost of production + setup cost).

To Model a Situation Where a Setup Cost Will Be