Question: 1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. 2. Now, assume that BestSystems can avoid $100,000

1. Given the same cost structure, should BestSystems make or buy the switch? Show your analysis. 2. Now, assume that BestSystems can avoid $100,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, BestSystems needs 77,000 switches a year rather than 72,000 switches. What should the company do now? 3. Given the last scenario, what is the most BestSystems would be willing to pay to outsource the switches?

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