Additional factors that should be considered include the economic stability of VB$,$ the ability of VB to manage quality, the ability of VB to $$partner$,$ the ability of VB to deliver on time, the lead time and quantity order requirements of VB$,$ and the impact of outsourcing on remaining employees.

$6.$ Cal$$s Carpentry is considering outsourcing its accounts receivable function. Currently, Cal employs two full$-$time clerks and one part$-$time clerk to manage accounts receivable. Each full$-$time clerk has an annual salary of $$36,000$ plus fringe benefits costing $30$ percent of the salary. The part$-$time clerk makes $$18,000$ per year but has no fringe benefits. Total salary plus fringe cost is $$111,600.$ Cal estimates that each account receivable incurs a $$10$ variable cost. The Small Business Accounts Receivables Group $($SBARG$)$ specializes in handling accounts receivable for small$-$ to medium$-$size companies. Doris Roberts from SBARG has offered to do the accounts receivable for Cal$$s Carpentry at a fixed cost of $$75,000$ per year plus $$30$ per account receivable. Next year, Cal expects to have $2000$ accounts receivable.

a$.$ Calculate the cost for Cal$$s Carpentry to continue doing accounts receivable in$-$house.

b$.$ Calculate the cost for Cal$$s Carpentry to use SBARG to handle the accounts receivable.

c$.$ If the fixed annual cost offered by SBARG is nonnegotiable but it is willing to negotiate the variable cost, what variable cost from SBARG would make Cal indifferent to the two options?

d$.$ What other alternatives might Cal consider in terms of his current staffing for accounts receivable?

e$.$ What additional criteria should Cal consider before outsourcing the accounts receivable?