Question
I need help wih question no 4 Use this information for the next four questions: Puffin Company currently purchases a component part for $13 but
I need help wih question no 4
Use this information for the next four questions:
Puffin Company currently purchases a component part for $13 but is considering making the part internally. It is considering two alternatives for making it internally. Alternative A would increase fixed costs by $12,000 per month and incur variable costs of $9 per component part. Alternative B would increase fixed costs by $20,000 per month and incur variable costs of $7 per component part. Puffin Company is unsure of demand.
Q. 4 So far, we have evaluated the decision in terms of demand risk. Assume that Puffin Company is leaning towards outsourcing and has received a bid from a new supplier to provide the component part for $12 (i.e., $1 less than the current supplier). Provide three additional factorsthat Puffin Company would want to consider before finalizing their decision even if these factors are difficult to quantify
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