InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred
the following manufacturing costs when it produced units last year:
Click the icon to view the manufacturing costs.
Read the requirements.
Requirement Now, assume that InteliSystems can avoid $ of fixed cc
rather than switches. What should the company do now?
Complete an outsourcing decision analysis assuming fixed costs can be avoide
InteliSystems
Outsourcing Decision
InteliSystems does not yet know how many switches it will need this year; however, another
company has offered to sell InteliSystems the switch for $ per unit. If InteliSystems
t will be idle cannot
Requirements
Given the same cost structure, should InteliSystems make or buy the switch?
Show your analysis.
Now, assume that InteliSystems can avoid $ of fixed costs a year by
outsourcing production. In addition, because sales are increasing,
InteliSystems needs switches a year rather than switches. What
should the company do now?
Given the last scenario, what is the most InteliSystems would be willing to pay
to outsource the switches?
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Data table
switches a year
