Redberry Company is considering whether to produce glass containers in$-$house, or outsource it to a local supplier.

An outside supplier has bid on the container and will provide it for $ $0\mathrm{.}25$ each based on production of $1000000$ units each year with a five year contract.

Cost of delivery to will be $$0\mathrm{.}05$ for each unit, holding costs will be $$0\mathrm{.}10$ and administrative costs will be $ $1000$ per month.

The containers can be produced in$-$house if a new machine is purchased. Its cost will be

$ $600000$ to buy the new machine, amortized over the duration of the contract.

Direct labor is $$0\mathrm{.}15$ for each container including benefits, and indirect labor $$0\mathrm{.}10$ each, materials cost $ $0\mathrm{.}10$ each. Overhead amount to $5\%$ of the prime cost $($labor $+$ materials$).$

$1-$ Provide a cost analysis of both options

$2-$ Should the containers be outsourced or made inhouse?

$3-$ What other considerations should be assessed, besides the cost of containers?