During three decades in operation, Infiniti Jewellers have acquired an extensive knowledge and expertise, through training and developing a group of specialist craftsmen. Their team consists of specialist goldsmiths, silversmiths and diamond setters. Their goal is to ensure they consistently exceed their customers' expectations by creating high quality and unique designs that have helped them maintain a profitable share of the market so far. In addition, Infiniti Jewellers' design and engineering departments have kept the company's profile up high by applying the latest technology in the design of the finest jewelries. Most subassembly work for the jewelries is subcontracted to reliable vendors. However, the final assembly of pieces for jewelries and inspection of all products are performed at the plant. Infiniti Jewellers recently developed a new design system for its special model of graduation rings. The production manager, Adam Jones, recommended that the first batch for the new design system of this model be manufactured in- house rather than by subcontractors as a result of the company's current availability of production capacity. This 200-unit production run has now been completed. The cumulative average labor hours per unit for the new design system was 200 hours. Infiniti Jewellers' experience with similar products indicates that a learning curve of 80% is applicable and that the learning factor can be expected to extend only through the fourth production run (200 per batch) for a total of 800 units. The decision facing the Infiniti Jewellers' management is whether to continue producing rings with the new design system in its own plant or to subcontract this part of work. The company's direct labor cost is $31 per direct labor hour. The company's purchasing agent, Linda Sheen, has recently received a proposal from Quest, a company that is specializing in jewelry components' assembly and the new design system of graduation rings. Quest has always been a high-quality and reliable vendor when working with Infiniti Jewellers in the previous years. To strategize the initial discussions with Quest, Linda planned to assess some relevant financial analysis since the terms of this proposal are negotiable