A hospital is evaluating whether to outsource or perform in-house a large set of blood and urine
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A hospital is evaluating whether to outsource or perform in-house a large set of blood and urine laboratory tests. The fixed cost of the laboratory equipment located in the hospital is $800,000 and the weighted average variable cost per test if performed in-house is $28.75. A third-party lab located three miles from the hospital will perform the same tests with more advanced and faster equipment. The lab distributes the results electronically to the hospital at a price of $31.00. If the annual volume last year was 250,000 tests, should the hospital do all lab tests in-house or outsource? Use the Excel template Break-Even to determine the best decision.
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Related Book For
Operations And Supply Chain Management
ISBN: 9780357131695
2nd Edition
Authors: David A. Collier, James R. Evans
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