Question: CASE STUDY Design engineering has created a new item that is to be reviewed by procurement as to whether it should be made or bought.

CASE STUDY

Design engineering has created a new item that is to be reviewed by procurement as to whether it should be made or bought. Engineering, sourcing, and planning have determined the following values to assist in the cost

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analysis:To determine the best option for the new item, the planners are required to calculate the cost first for the outsourcing option and then for the insourcing option. The source with the lowest cost will provide a significant criterion for the sourcing option.Outsourcing OptionThe planner began by determining the outsourcing option. After reviewing several suppliers, one was selected as the probable supplier. The planner received the following cost information to assist in the outsource cost estimate.

CASE STUDY Design engineering has created a new item that is

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