Outsourcing Analysis Your company sells riding gloves and has the following three options: Option 1: Make your own gloves at your own plant Fixed cost at own plant = $3 million Variable cost/pair at own plant = $5 Option 2: Outsource to a supplier in the same town Fixed cost at supplier’s plant = $2 million Variable cost/pair at supplier’s plant= $7 Option 3: Buy from Mexico at $4/pair but you need to pay a one-time set-up fee of $6 million Indicate over what range each of the alternatives Option 1, 2, 3 is the low-cost choice. Please show all calculations.

Outsourcing Analysis Your company sells riding gloves and has the following three options: Option 1: Make your own gloves at your own plant Fixed cost at own plant = $3 million Variable cost/pair at own plant = $5 Option 2: Outsource to a supplier in the same town Fixed cost at supplier’s plant = $2 million Variable cost/pair at supplier’s plant= $7 Option 3: Buy from Mexico at $4/pair but you need to pay a one-time set-up fee of $6 million Indicate over what range each of the alternatives Option 1, 2, 3 is the low-cost choice. Please show all calculations.

MKTG 12:STUDENT ED.-TEXT

12th Edition

ISBN:9781337407595

Author:Lamb

Publisher:Lamb

Chapter13: Supply Chain Management And Marketing Channels

Section: Chapter Questions

Problem 2LO

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