Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
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Chapter 2, Problem 15DQ
Summary Introduction

To determine: Internal issues that should be addressed by the managers while outsourcing.

Introduction:

Outsourcing:

Outsourcing is a policy followed by firms where they hire an outside party to produce goods which were previously done in-house by their own employees. Outsourcing is seen as a cost-cutting measure where they perform similar jobs with reduced costs. The downside of outsourcing is the impending loss of jobs in the home country.

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PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $18,750 to purchase or (2) a used sedan that would cost $12,750.They anticipate that the new subcompact would get 37 miles per gallon (combined highway and around town driving) while the sedan would get 26 miles per gallon. Based on their road tripping history they expect to drive 13,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $2.93 per gallon.Question: How many miles would the Ricks need to drive before the cost of these two options would be the same? (Display your answer to the nearest whole number.) (Hint:…
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