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This study source was downloaded by 100000809576529 from CourseHero.com on 05-15-2024 00:18:38 GMT -05:00
https://www.coursehero.com/file/83040252/MGMT-480-Chapter-06-EOA-Outsourcing-Decisionsdoc/ Chapter 06 Exploring Operations Activity: Outsourcing Decisions
In-House versus Outsourcing
Conceptual Overview: Compare the costs of in-house
production versus outsourcing.
The fixed costs of in-house production (FC) and the cost per unit produced (VC1)
versus the cost per unit if outsourced determines the break-even point for deciding
between the two. When the graph first loads, the parameter values represent a
decision for which the fixed costs are $250,000 (the intercept of the blue in-house
line is FC = 2.5) and the cost per unit produced in-house is $20 (VC1 = 20 is the
slope of the blue in-house line). The red line for out