RealEstate Nerds Co. needs a new designing software for providing potential client with a clear

5D design of their home if they choose to remodel it using the company's designs. Currently

they design for 1,000 clients annually. Software engineering resources (personnel and lab) to

complete the development of the software will cost $3,000 per week. If the engineers don't

work on this project, they will be assigned to another. The approximate cost per usage of their

own software is estimated to be $50/design usage which includes labor costs for an individual

to input the customer data and overhead costs.

Software Solutions, Inc., already has a 6D model software that is already developed and is very

similar to the one that RealEstate Nerds needs. If the Nerds choose to outsource this software

usage, Software Solution can make the necessary changes to suit what the Nerds need in just 4

weeks, at a price of $60/design usage. With Software Solutions version of the software,

customers can put in their own data and no additional overhead would be incurred.

Required:

a.

Should RealEstate Nerds go forward with their own software, or should it accept

Software Solution's offer?

b.

If RealEstate Nerds decided to outsource the new module to Software Solution, how

much would the other projects that RealEstate Nerds' engineers work on have to

return/save to make outsourcing financially beneficial?