WatchNU is a company that designs and manufacturers drones for military use. The supply manager is getting ready to renegotiate the contract with the security service provider that it uses for its offices and manufacturing plant. Three suppliers responded to the RFP for security services for the next three years. The current security services provider, SecureIT, quoted $990,000 per year.

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WatchNU is a company that designs and manufacturers drones for military use. The supply manager is getting ready to renegotiate the contract with the security service provider that it uses for its offices and manufacturing plant. Three suppliers responded to the RFP for security services for the next three years. The current security services provider, SecureIT, quoted $990,000 per year. Two suppliers that have not been used by Watch NU in the past quoted $890,000 and $965,000, respectively. The supply manager is also analyzing the costs associated with insourcing security services rather than using a supplier as a way to reduce costs and provide greater control over security. The salary and benefits package for a full-time security services manager is estimated to be $100,000. Other fixed costs are estimated to be $30,000/year. Three security guards are needed 24 hours/day, 365 days per year. The salary and benefits for the security guards are $30/hour. What are the costs to insource the security services? Do you recommend insourcing or outsourcing the security services? Why?

Related Book For answer-question

Managing Operations Across The Supply Chain

4th Edition

Authors: Morgan Swink, Steven Melnyk, Janet L. Hartley, M. Bixby Cooper

ISBN: 9781260547634