Make or Buy

question 65

Essay

Make or buy.Towson,Inc. ,produces semiconductors of which part no.200 is a subassembly.Towson,Inc. ,currently produces part no.200 in its own shop.The Baltic Company offers to supply it at a cost of $205 per 500 units.An analysis of the costs Towson incurs producing part no.200 reveals the following information:

Required:
Management of Towson,Inc. ,needs your advice in answering the following questions:
a.Should Towson,Inc. ,accept the offer from Baltic if Towson's plant is operating well below capacity?
b.Should the offer be accepted if Baltic reduces the price to $170 per 500 units?
c.Suppose Towson can find other profitable uses for the facilities that it now uses in turning out part no.200.How would that fact affect the price Towson is willing to pay Baltic?
(Towson,Inc. ;make or buy. )

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Definitions:

Efficacy

The ability of a product or treatment to provide a beneficial effect (such as reducing or curing a disease) under ideal and controlled conditions.

Researcher Allegiance Effects

The influence that a researcher's preferences, beliefs, or biases may have on the outcome of a study, potentially skewing results in favor of their favored theoretical framework or treatment modality.

Meta-analysis

A statistical technique that combines the results of multiple scientific studies to arrive at a conclusion about an overall body of research.

Humanistic Therapy

A therapeutic approach that emphasizes personal growth and self-actualization, focusing on the client's subjective experience and innate drive towards self-fulfillment.