The Crown Company Must Decide Whether to Make or Buy

question 97

Essay

The Crown Company must decide whether to make or buy part 128PC. Although Crown's idle equipment could be used to produce up to 10,000 units of the part, the company presently needs only 7,000 units. The following shows the estimated cost of making part 128PC. Reuten Company will sell part 128PC to the Crown Company for $20 per unit.
Required: Determine whether Crown should make or buy the part, and explain why.

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Definitions:

Marketing Support Objectives

Marketing support objectives are goals aimed at enhancing the effectiveness of marketing efforts, including activities designed to support sales, brand recognition, and customer engagement.

Market Segmentation

The process of dividing a broader market into smaller, distinct groups of consumers who have common needs or characteristics.

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts these processes have on the consumer and society.

Marketing Strategies

Plans of action designed to promote and sell a product or service by identifying target markets and developing a mix of marketing tactics to reach them.