A Company Is Deciding If It Should Do Design of a Product

question 101

Essay

A company is deciding if it should do design of a product in-house or outsource the design. If outsourced the cost for a low bidder would be $40,000 and the cost for an expensive bidder $100,000. To do the design in-house would require over-time for an already stretched design team with total costs of $70,000. If all three designs (in-house, low bid, high bid) are equal in quality and the likelihood of finding a low bidder is 60% (meaning that 40% of the time the firm will have to hire the expensive bidder), should the company outsource design or do it in-house?

---

Definitions:

Specific Equipment

Tools or machinery designed for particular tasks or industries, crucial for certain operations or processes.

Likes

Expressions of approval or favor towards something or someone, often used in the context of social media interactions.

Dislikes

Negative feelings or aversions individuals have towards specific objects, people, or situations.

Impression Management

The process by which people attempt to control or manipulate the perceptions others have of them, often to appear favorable or competent.