EBK OM
EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
Question
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Chapter 6, Problem 7PA

a

Summary Introduction

Interpretation:Decisions needs to be made whether company should go for outsourcing or in-house production.

Concept Introduction: The total cost of production or outsourcing and break-even point are useful quantifiable measures which helps company in making operational decisions which affects the company profits.

b

Summary Introduction

Interpretation:Decisions needs to be made whether company should go for outsourcing or in-house production and todetermine break even quantity.

Concept Introduction: The total cost of production or outsourcing and break-even point are useful quantifiable measures which helps company in making operational decisions which affects the company profits.

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Students have asked these similar questions
Rayyan manufacturing company is trying to decide whether to make-or-buy an accessory item for one of their products. It is projected that this item will sell for $14 each. If the item is outsourced, there is virtually no cost other than the $10 per unit that they would pay their supplier. Internally, they have a choice of making a process to produce the item which requires an investment of $300,000 for design and equipment, but results in a $9 per unit cost. Regardless of whether the item is outsourced or produced internally, there is a 60% chance that they will sell 250,000 units, and a 40% chance that they will sell 150,000 units.
Develop a high-level suppliers, inputs, process, outputs, and customers (SIPOC) process map, identifying the quantitative and qualitative variables that are likely to contribute to the conflict.
The Vera Molding company has two alternatives for meeting a customer requirement for 9,500 units of a specialty molding. If done in-house, fixed cost would be $300,000 with variable cost at $40 per unit. Alternative two is to outsource for a total cost of $80 per unit. What is the break-even quantity? Round your answer to the nearest whole number.  units Should the firm make the 9,500 units in-house or outsource? Firm should produce the molding .
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