A Company Asked One of Their Analysis Team to Analyze

Essay

A company asked one of their analysis team to analyze and create models that help decide whether they should manufacture a particular product or outsource its production. The different components are given below:
Fixed Cost, FC = $25,000
Material Cost per Unit, MC = $2.15
Labor Cost per Unit, LC = $2.00
Outsourcing Cost per Unit, O = $4.50
Note that per-unit material and labor cost together make up the variable cost per unit.
Use a two-way data table to show how the savings due to outsourcing changes as a function of different production volume and different bids on per-unit cost for outsourcing. Vary the production volume from 0 to 100,000 in increments of 10,000. The six bids are $3.11, $3.49, $4.50, $4.98, $5.12, and $5.45.