InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred

the following manufacturing costs when it produced $66,000$ units last year:

$($Click the icon to view the manufacturing costs.$)$

Read the requirements.

Requirement $2.$ Now, assume that InteliSystems can avoid $$95,000$ of fixed cc

rather than $66,000$ switches. What should the company do now?

Complete an outsourcing decision analysis assuming fixed costs can be avoide

InteliSystems

Outsourcing Decision

InteliSystems does not yet know how many switches it will need this year; however, another

company has offered to sell InteliSystems the switch for $$13\mathrm{.}00$ per unit. If InteliSystems

t will be idle cannot

Requirements

Given the same cost structure, should InteliSystems make or buy the switch?

Show your analysis.

Now, assume that InteliSystems can avoid $$95,000$ of fixed costs a year by

outsourcing production. In addition, because sales are increasing,

InteliSystems needs $71,000$ switches a year rather than $66,000$ switches. What

should the company do now?

Given the last scenario, what is the most InteliSystems would be willing to pay

to outsource the switches?

Get more help $-$

Data table

$000$ switches a year