A U.S.motorcycle manufacturer has the option of either making the gas tank in their newly designed cycle, or subcontracting it out to a Singapore manufacturer.Costs for the two options are:
a.Which option would be preferred at an annual volume of 1, 000 gas tanks?
b.Which option would be preferred at an annual volume of 5,000 gas tanks?
c.For what range of production volume would it be better to make the gas tanks in-house?
Definitions:
Independent Agencies
Government organizations that operate independently of the executive departments, tasked with regulating and overseeing specific areas of public policy.
Social Regulation
Rules imposed by government to correct market failures and achieve social policy goals, such as environmental protection and worker safety.
Executive Agencies
Agencies of the executive branch of government that are task-focused and responsible for the execution of laws and government policies.
Economic Regulation
Government-imposed restrictions on the economic activities of individuals or companies to correct market failures or achieve social goals.
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