Enthusiastic Products Is Deciding Whether to Outsource Production of a Certain

question 96

Essay

Enthusiastic Products is deciding whether to outsource production of a certain component that is included in all of its products. It currently costs Enthusiastic Products $1.20 to make each component in-house. If Enthusiastic Products outsources, it can buy the component ready-made for $0.90 each, and can shut down the production facilities it is currently using to manufacture the component, and save $20,000 a year in fixed costs. Annual requirement for the component is 12,000 units. What is the effect of outsourcing?

---

Definitions:

Actual Malice

In defamation law, the condition where a statement is made knowing it is false or with reckless disregard for its truth.

Defamation Claim

A Defamation Claim involves a legal accusation that an individual made false statements that caused harm to someone's reputation.

Trespass to Personal Property

A legal term referring to the interference with another person's personal property without permission.

Unsolicited E-mails

Electronic mail messages that are sent without the recipient's prior request or consent, often considered as spam.