bunkt a. What would be your decision "buy-or-make"? Explain b. What are the risks of making C5 internally? Explain c. Does your choice increase or decrease operational flexibility, cost reduction, and supply risk? Explain

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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$95,000.00
$90,000.00
$85,000.00
$80,000.00
$75,000.00
$70,000.00
D
D
M
2000 2100 2200 2300
2400 2500
2600
2700 2800 2900 3000
a. What would be your decision "buy-or-make"? Explain
b. What are the risks of making C5 internally? Explain
c. Does your choice increase or decrease operational flexibility, cost reduction, and supply risk?
Explain
Transcribed Image Text:$95,000.00 $90,000.00 $85,000.00 $80,000.00 $75,000.00 $70,000.00 D D M 2000 2100 2200 2300 2400 2500 2600 2700 2800 2900 3000 a. What would be your decision "buy-or-make"? Explain b. What are the risks of making C5 internally? Explain c. Does your choice increase or decrease operational flexibility, cost reduction, and supply risk? Explain
A purchasing manager is preparing a report to decide the supply strategy of component C5. Based on the
sales forecast range, production department is required to be prepared to provide between 2300 and 3000
components C5 per year (see graph).
$105,000.00
$100,000.00
$95,000.00
$90,000.00
$85,000.00
$80,000.00
$75,000.00
$70,000.00
L
--Yearly cost insource
17
2000 2100 2200 2300
2400
Yearly cost outsourcing
2500 2600
2700
2800
2900
3000
Transcribed Image Text:A purchasing manager is preparing a report to decide the supply strategy of component C5. Based on the sales forecast range, production department is required to be prepared to provide between 2300 and 3000 components C5 per year (see graph). $105,000.00 $100,000.00 $95,000.00 $90,000.00 $85,000.00 $80,000.00 $75,000.00 $70,000.00 L --Yearly cost insource 17 2000 2100 2200 2300 2400 Yearly cost outsourcing 2500 2600 2700 2800 2900 3000
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