Assignment 2: /18 Marks The assignment is individual; 2 students should NOT submit identical submissions. If identical submissions are received, the marks will be split between the students (the highest possible mark is 50%). Source as necessary. 1. A clothing company has two options for meeting a customer order for 890,000 units of a zipper used in their popular autumn jackets. If completed in-house, the fixed cost would be $1,500,000, with a variable cost of $1.80 per unit. Alternative two is to outsource, for a total cost of $3.60 per unit. a. Determine the break-even point. 1. 2 marks for showing accurate work, 2 marks for the correct final answer /4 b. Determine if they should make the item in-house or outsource it and explain why in a recommendation statement. 1. I mark for showing accurate work (calculating total cost in-house and total cost outsourced). 1 mark for accurate mathematical answer. 1 mark for correct answer and recommendation. /3 2. As per our textbook and classroom learning, how can break- even analysis be used to help managers make outsourcing decisions? /5 3. Think of the last time you went to the ATM. a. Describe where this activity would be placed on the Service positioning matrix. /1 b. Why would it be placed there? /5 Rubric: 0-15 High-level response is provided only without details/explanation provided. High-level response is provided only without details/explanation provided. Example: The activity would be placed XX on the SPM Example: The activity would be placed XX on the SPM Example: break-even can help managers make outsourcing decisions. 12-16 Marks Response provides some details and insights into how breakeven analysis is an effective approach for outsourcing decisions. Response provides some details and insights into why the activity is placed where it is on the SPM Example: This activity is placed XX on the SPM, this is supported by [ evidence/insight/detail] Example: Break-even analysis can help managers make outsourcing decisions by [1 evidence/detail]. Example: This activity is placed XX on the SPM, this is supported by [1 evidence/insight/detail] 16-18 Marks Response provides detailed insights and explanations demonstrating an understanding of how outsourcing decisions can be supported through break-even analysis. Response provides detailed insights and explanations demonstrating an understanding of why the activity is positioned where it is on the SPM and provides detailed insights to substantiate the response. Example: Example: This activity is placed XX on the SPM, this 1s supported by [2 evidence/insight/detail] Example: Example: This activity is placed XX on the SPM, this is supported by [2 evidence/insight/detail]