0% Plagiarism Guaranteed & Custom Written

Strategically thinking, why might management opt for other than the most economical choice?

05 / 03 / 2018 Assignment

This paper circulates around the core theme of Strategically thinking, why might management opt for other than the most economical choice? together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 45. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

Teloxy Engineering has received a onetime contract
to design and build 10,000 units of a new product. During the proposal process,
management felt that the new product could be designed and manufactured at a
low cost. One of the ingredients
necessary to build the product was a small component that could be purchased
for $60 in the marketplace, including quantity discounts. Accordingly, management budgeted $650,000 for
the purchasing and handling of $10,000 components plus scrap.

During the design phase, your engineering team
informs you that the final design will require a somewhat higher-grade
component that sells for $72 with quantity discounts. The new price is substantially higher than
you had budgeted for. This will create a
cost overrun.

You meet with your manufacturing team to see if they
can manufacture the component at a cheaper price than buying it from the
outside. Your manufacturing team informs
you that they can produce a maximum of 10,000 units, just enough to fulfill
your contract. The set up cost will be
$100,000 and the raw material cost is $40 per component. Since Teloxy has never manufactured this
product before, manufacturing expects the following defects:

% defective 0 10 20 30 40

Probability of 10 20 30 25 15

Occurrence (%)

All defective parts must be removed and repaired at
a cost of $120 per part.

Questions:

1.
Using expected
value, it is economically better to make or buy the component?

2.
Strategically
thinking, why might management opt for other than the most economical choice?


100% Plagiarism Free & Custom Written


International House, 12 Constance Street, London, United Kingdom,
E16 2DQ

Company # 11483120

STILL NOT CONVINCED?

We've produced some samples of what you can expect from our Academic Writing Service - these are created by our writers to show you the kind of high-quality work you'll receive. Take a look for yourself!

View Our Samples

Benefits You Get

  • Free Turnitin Report
  • Unlimited Revisions
  • Installment Plan
  • 24/7 Customer Support
  • Plagiarism Free Guarantee
  • 100% Confidentiality
  • 100% Satisfaction Guarantee
  • 100% Money-Back Guarantee
  • On-Time Delivery Guarantee
FLAT 25% OFF ON EVERY ORDER. Use "FLAT25" as your promo code during checkout