Access over 20 million homework & study documents

Make Or Buy Decision

Content type
User Generated
Subject
Business
Type
Homework
Rating
Showing Page:
1/4
1
Make VS Buy
Make or Buy decision
Assignment
Instructor
Institute
Submitted On

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/4
2
Make VS Buy
Cost Analysis
Outside purchase
Demand per year 250000 units / year
Valley to Valley cost
Purchase price 750000/ year
Annual inspection cost 35000/ year
Processing cost 5000/year
Total cost for outside purchase 790000/year
Total cost / day 2171$
Manufacturing cost
Material cost 1000/day*1$ per unit = 1000$
Outputs units/ day 1000
So for 250,000 units, it takes 250000/1000 = 250 days
Working hours/ day 2083 hours/ year 6 hours / day
Labor cost (6hours/day* 18$/hour * 1000 units/day) = 10800/day
Cost of new production line 285000
Since it produces 80000000 units

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/4

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 4 pages?
Access Now
Unformatted Attachment Preview
Make VS Buy 1 Make or Buy decision Assignment Instructor Institute Submitted On Make VS Buy 2 Cost Analysis Outside purchase Demand per year 250000 units / year Valley to Valley cost Purchase price 750000/ year Annual inspection cost 35000/ year Processing cost 5000/year Total cost for outside purchase 790000/year Total cost / day 2171$ Manufacturing cost Material cost 1000/day*1$ per unit = 1000$ Outputs units/ day So for 250,000 units, it takes Working hours/ day Labor cost 1000 250000/1000 = 250 days 2083 hours/ year (6hours/day* 18$/hour * 1000 units/day) = Cost of new production line Since it produces 80000000 units 6 hours / day 10800/day 285000 Make VS Buy 3 So per unit cost of production line 285000/ 80000000 = 0.0035 Cost for 1000 units/ day 0.003* 1000 = Total cost = (material cost labor cost + production cost) = 3.5$/ day 11803.5$/ day Over view A make on or purchase choice is some piece of the vital choice making procedure at an assembling association. Conceivably, an organization chooses what its center skills are, manufactures an association to secure and upgrade these assets, and considers the conceivable buy of any part or adminis ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Just what I was looking for! Super helpful.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents