Emery Products Is Deciding Whether to Outsource the Production of a Certain

question 130

Essay

Emery Products is deciding whether to outsource the production of a certain component that is included in all of its products.It currently costs Emery Products $1.20 to make each component in-house.If Emery 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:

Cervix

The lower, narrow part of the uterus that connects to the vagina in female anatomy.

Lightening

In pregnancy, the descent of the fetus into the pelvic cavity before the onset of labor.

Diaphragm

The diaphragm is a large, dome-shaped muscle located below the lungs that plays a crucial role in the respiratory process by helping to inhale and exhale air.

Oxytocin

Sometimes referred to as the "love hormone," it plays a significant role in facilitating social bonding, trust, and group cohesion.