5 In-house or outsource ? (20 points for all questions) As a production engineer working for an auto maker, you have been tasked with determining the best way to acquire the plastic instrument panel of the most recent vehicle model. Specifically, you must advise upper management as to whether it is best to produce the panel in-house or to outsource its fabrication to a supplier. The instrument panel is to be manufactured by injection molding. Although there is sufficient expertise in your company to produce the panel in-house, an injection molding machine would need to be purchased and a manufacturing area setup specifically for thispurpose at a total cost (purchase and installation) of $400,000. In addition, the machine would entail monthly operating and maintenance costs of $1,000. Based on your estimates, the total cost of materials and labour to produce the instrument panel for one vehicle in-house would be $60. The production process would inevitably lead to defective panels being produced and needing to be thrown away (at a cost of $60 each). Based on information acquired from the injection moldingindustry, the rate of occurrence of defects can be expected to behave as a normal distribution withan average of 3% and a standard deviation of 0.5%. Based on sales projections for the vehicle, you estimate that the monthly production level willbe at least 300 units, at most 5,500 units and most likely 2,800 units. Your company's MARR is 10% compounded monthly and your analysis is to be based on a 5 years study period. To simplify your analysis, you may assume that all costs occur at the end of their respective months. All calculations inust be performed in MS Excel. Answers to all questions should appear in the final version of your spreadsheet. QUESTIONS: I. Draw a cash flow diagram to represent the in-house production option. (1 point) 5 In-house or outsource ? (20 points for all questions) As a production engineer working for an auto maker, you have been tasked with determining the best way to acquire the plastic instrument panel of the most recent vehicle model. Specifically, you must advise upper management as to whether it is best to produce the panel in-house or to outsource its fabrication to a supplier. The instrument panel is to be manufactured by injection molding. Although there is sufficient expertise in your company to produce the panel in-house, an injection molding machine would need to be purchased and a manufacturing area setup specifically for thispurpose at a total cost (purchase and installation) of $400,000. In addition, the machine would entail monthly operating and maintenance costs of $1,000. Based on your estimates, the total cost of materials and labour to produce the instrument panel for one vehicle in-house would be $60. The production process would inevitably lead to defective panels being produced and needing to be thrown away (at a cost of $60 each). Based on information acquired from the injection moldingindustry, the rate of occurrence of defects can be expected to behave as a normal distribution withan average of 3% and a standard deviation of 0.5%. Based on sales projections for the vehicle, you estimate that the monthly production level willbe at least 300 units, at most 5,500 units and most likely 2,800 units. Your company's MARR is 10% compounded monthly and your analysis is to be based on a 5 years study period. To simplify your analysis, you may assume that all costs occur at the end of their respective months. All calculations inust be performed in MS Excel. Answers to all questions should appear in the final version of your spreadsheet. QUESTIONS: I. Draw a cash flow diagram to represent the in-house production option. (1 point)