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Sage Inc. intends to produce 2000 parts per week of water bottles and anticipates that the total lifetime demand of such water bottles would be
Sage Inc. intends to produce 2000 parts per week of water bottles and anticipates that the total lifetime demand of such water bottles would be 400,000 . They have an option of producing the water bottles themselves or outsourcing the production. If they produce the water bottles themselves, one person could make 400 parts per week. The cost to hire a person is $550 per week. The direct material cost will be $6 per part and there will be a one-time mold purchase cost of $50,000. If they outsource it, they will receive 2000 parts per week at \$8 per part. The Trucking cost will be $500 per week. This option will also include a one-time mold purchase cost of $50,000. Which option is better and why
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