Problem 10-2 (Algo) An online retailer must decide if it should insource or outsource its Website maintenance. The company estimates that 3,400 hours per year will be needed to maintain its Website. To insource maintenance requires $33,000 in fixed costs per year and $25/hour in variable costs. Quotes from suppliers show that Website maintenance can be outsourced for $32 per hour. a. Compute the total annual cost for insourcing and outsourcing the maintenance. Insource Outsource Total Cost per year per year b. Which option would you prefer? O Insource O Outsource

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...
icon
Related questions
Question

Please do not give solution in image format thanku

 

Problem 10-2 (Algo)
An online retailer must decide if it should insource or outsource its Website maintenance. The company estimates that 3,400 hours per
year will be needed to maintain its Website. To insource maintenance requires $33,000 in fixed costs per year and $25/hour in
variable costs. Quotes from suppliers show that Website maintenance can be outsourced for $32 per hour.
a. Compute the total annual cost for insourcing and outsourcing the maintenance.
Insource
Outsource
Total Cost
O Insource
O Outsource
per year
per year
b. Which option would you prefer?
Transcribed Image Text:Problem 10-2 (Algo) An online retailer must decide if it should insource or outsource its Website maintenance. The company estimates that 3,400 hours per year will be needed to maintain its Website. To insource maintenance requires $33,000 in fixed costs per year and $25/hour in variable costs. Quotes from suppliers show that Website maintenance can be outsourced for $32 per hour. a. Compute the total annual cost for insourcing and outsourcing the maintenance. Insource Outsource Total Cost O Insource O Outsource per year per year b. Which option would you prefer?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 4 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.