A company (The Gulf Company) used to buy components from a Saudi supplier which had its...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A company (The Gulf Company) used to buy components from a Saudi supplier which had its price fixed throughout the years at $50 per component and has been reliable source. Now The Gulf Company has reduced its production due to lower demand and better work efficiency, thus has the capacity to make its own parts in-house which costs them $40 per component. It requires 300 parts per year and has set $25,000 in yearly investments. [8 Marks] ii. iii. iv. Will it be better to buy the components or make them locally inhouse? If another alternative Bahraini supplier is considered, which would cost them $50 to buy for the first 100 parts, and $45 for every other part ordered. Would it be better to buy from them or stick to the old supplier or make them in-house? If the demand was increased to 2000 parts would your decision change or not? Give some guidelines and set of rules to follow in order to decide on the best action or decision to make in the future. A company (The Gulf Company) used to buy components from a Saudi supplier which had its price fixed throughout the years at $50 per component and has been reliable source. Now The Gulf Company has reduced its production due to lower demand and better work efficiency, thus has the capacity to make its own parts in-house which costs them $40 per component. It requires 300 parts per year and has set $25,000 in yearly investments. [8 Marks] ii. iii. iv. Will it be better to buy the components or make them locally inhouse? If another alternative Bahraini supplier is considered, which would cost them $50 to buy for the first 100 parts, and $45 for every other part ordered. Would it be better to buy from them or stick to the old supplier or make them in-house? If the demand was increased to 2000 parts would your decision change or not? Give some guidelines and set of rules to follow in order to decide on the best action or decision to make in the future.
Expert Answer:
Answer rating: 100% (QA)
To determine whether it is more beneficial for The Gulf Company to buy components or produce them inhouse we need to compare the costs and consider th... View the full answer
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
Posted Date:
Students also viewed these general management questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Let v = (2, 5) and w = (3, 2). Find the length of v + w.
-
If f(x) = [x] + [x], show that lim x 2 f(x) exists but is not equal to f (2).
-
A 2-m3 rigid insulated tank initially containing saturated water vapor at 1 MPa is connected through a valve to a supply line that carries steam at 400°C. Now the valve is opened, and steam is...
-
As the manager of an Aunty Pasta Corporation restaurant, you must deal with a variety of business transactions. Requirement 1. Give an example of a transaction that has each of the following effects...
-
The investments of Macon, Inc., include a single investment: 8,000 shares of Pacific Wave, Inc. common stock purchased on August 10, 2012, for $8 per share including brokerage commission. These...
-
Turner Hardware is adding a new product line that will require an investment of $1,470,000. Managers estimate that this investment will have a 10-year life and generate net cash inflows of $310,000...
-
Javier is a police officer or Javier is a little league coach. If Javier is a police officer, then Javier is a community leader. Javier is a little league coach if and only if Javier is a community...
-
Write a short code to properly delete the node at the beginning of the list(with data=10) in the list below (Figure 5) in other words. After your code executes, the lost will contain nodes with the...
-
Discuss the importance of strategic planning in preparing for negotiations. Can you identify any historical negotiations where successful strategic planning prevailed, or where a lack of strategic...
-
A moon orbits a giant planet in a circular orbit with a semi-major axis a = 2.0473 x 10^8 metres and an orbital period P = 2.1299 days. What is the mass of the giant planet in kilograms to five...
-
What does strategic planning look like in your organization? Is strategic planning in your organization effective, or not? Why? Describe your experience, both good and bad, with strategic planning.
-
You must drag a box of books ( m = 1 0 0 kg ) across a level floor horizontally at a constant speed. The coefficient of kinetic friction is uk = 0 . 6 0 0 . You pull the box using a rope which makes...
-
According to some sources, the night the ship Titanic sank the time between the order to turn \"hard to starboard\" and the collision was 4 6 seconds. At this time Titanic was speeding at 2 2 . 5...
-
What was the overall percentage variance for Maxine's dinner cost per student? Is this cause for concern? Answer Which product category showed the highest percentage variance? What do you think may...
-
1. Which of the four major types of information systems do you think is the most valuable to an organization? 2. How do you critically associate the ideas of business agility and business efficiency...
-
Motivating desired performance DMT Biotech is a biotechnology research and development company that designs products for the needs of life science researchers. The company consists of an...
-
Achieving relevance in MACS design Identify the four components that MACS designers should consider when addressing the relevance of the systems information and explain why each component is...
-
Planning and flexible budget variances Tang Company??s production performance report for April includes the information shown below. Prepare a flexible budget for the items shown and compute the...
-
There are two sections of an introductory statistics course. Section A has 25 students and section B has 30 students. All students took the same final exam. The mean score in section A was 82 and the...
-
Addison has been told that her average on six homework assignments in her history class is 85. She can find only five of the six assignments, which have scores of 91, 72, 96, 88, and 75. What is the...
-
A data set has a median of 17, and six of the numbers in the data set are less than 17. The data set contains a total of n numbers. a. If n is odd, and exactly one number in the data set is equal to...
Study smarter with the SolutionInn App