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2 Tech company makes three types of products the XE, JE and the YO .All the products are manufactured in three main stages of production:

2 Tech company makes three types of products the XE, JE and the YO .All the products are manufactured in three main stages of production: the build stage the program stage and the test stage. The work is technical and requires the use of skilled labour which is in short supply. Due to the shortage of labour supply company is considering an option of outsourcing. The Production Manager of the Company is reviewing the operations of the company with a view to making operational decisions for the next year. Details of the products manufactured by the Company are given below: Product XE JE YO Demand (units) Choose between) 2,200 to 2400 2600 to 2700 4,000 to 4500 Variable cost to make (OMR per unit) 50 60 90 Buy-in price (OMR per unit) 53 62.5 88 Labour Hours required per unit Required: 3Hours 2Hours Hour a) Based on the above information, which products should the company make and which should it buy? 5 Marks b) The availability of labour is limited to 11000 hours. Based on the availability of the limited labour hours, rank the products and suggest which product should be outsourced and how much.( Show all the steps) 15 Marks c) Evaluate the main factors that should be considered while making a decision of outsorcing. 10 Marks (Total -30 Marks)

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