Refer to the data in problem 5-38. Assume Allterra Company has an opportunity to purchase tube kits from Colorado Mountain Bikes for $40 per kit. Colorado Mountain Bikes could supply any or all of the tube kits that Allterra needs to produce frames.

Colorado Mountain Bikes' products are high quality, at least as good as Allterra's quality. Colorado Mountain Bikes guarantees delivery of tube kits to meet Allterra's production schedule.

Allterra's management has asked for your opinion about the opportunity to buy tube kits from Colorado Mountain Bikes. Write a short report telling Allterra's management what things they should consider in deciding whether to purchase tubes from Colorado Mountain Bikes or make tubes themselves.