As you prepare for the meeting, it is evident that action is imperative to address Saskatoon Sweet Treats' declining margins. While investing in new equipment seems straightforward, the capital investment needed must exceed the company's $10$ percent cost of capital rate to gain approval. Reviewing CandyCo's proposal, you contemplate potential overhead cost reductions if production were outsourced. The estimate provided by the accounting department is that overhead costs allocated to the brand could be reduced by approximately $30$ percent if production is outsourced. Historically, Saskatoon Sweets prioritized in$-$house production for quality control, but outsourcing may offer cost advantages. Saskatoon Sweets has an excellent reputation with its customers, and the customer service level for Saskatoon Sweet Treats is around $98$ percent.

As the student responsible for this assignment, your objective is to deliver a concise recommendation backed by a comprehensive analysis of the available options during the upcoming team meeting. To achieve this, please outline three alternatives, assess their respective merits and drawbacks, and subsequently offer your recommendation.