After conducting appropriate calculations that include the repairs cost, average interruption cost, costs of assembling and the variable overhead costs, as well as distributing the cost of faulty units between the good ones, I have discovered that the total variable unit cost per engine would be ranging from $4664 and $5514. The Ball company is asking for a price of 4750 per engine block with the assumption of delivery costs excluded as per the repairs calculations. The subsequent 5 year plan costs would total to $24,262,751 for 1000 units per year. If we average the minimum and maximum variable costs for the MCT we would arrive at $5089 unit cost and a total 5 year cost of $25,445,000 for 1000 units per year. Therefore, my recommendation would be to outsource to the Ball company as there would be significant savings of over a million dollars over the 5 year contract