Problem $10-5($Algo$)$

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, SecurelT, quoted $$946,000$ per year. Two suppliers that have not been used by WatchNU in the past quoted $$1,050,000$ and $$1,158,000$ 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 for a full$-$time security services manager is estimated to be $$100,000.$ Other fixed costs are estimated to be $$30,000$ per year. Three security guards are needed $24$ hours per day, $365$ days per year. The salary and benefits for the security guards is $$35$ per hour.

a$.$ What are the costs to insource the security services?

b$.$ Do you recommend insourcing or outsourcing the security services?

Required $A$

Required B

What are the costs to insource the security services?

$\backslash$table$[[$Variable cost$,],[$Fixed cost$,],[$Total cost$,]]$