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Lay Corporation is considering outsourcing its manufacturing operations for one of its products, Product Delta. The company currently incurs total manufacturing costs of $200,000 per
- Lay Corporation is considering outsourcing its manufacturing operations for one of its products, Product Delta. The company currently incurs total manufacturing costs of $200,000 per month for Product Delta, which includes $100,000 of fixed costs and $100,000 of variable costs. A potential supplier has offered to manufacture Product Delta for a fixed monthly fee of $150,000. Analyze the cost implications of outsourcing production versus continuing to manufacture in-house, considering both financial and non-financial factors. Additionally, discuss any potential risks associated with outsourcing and how Lay Corporation could mitigate these risks.
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