Summarize the article and Formulate an essay of the article (Case 6 Insourcing/Outsourcing: The FlexCon Piston Decision) and solve the questions included: A essay of an article contains an explanation of: BACKGROUND

PROBLEM

QUANTITATIVE ANALYSIS

Table 1: Insourcing/Outsourcing Cost Factors

INSOURCING COSTS:

Direct Materials Costs

Year One

Year Two

Direct Labor Costs

Year One

Year Two

Indirect Labor Costs

Year One

Year Two

Factory Overhead and Administrative Costs

Table 2: Total Factory Overhead and Administrative Costs

Year One

Year Two

Preventive Maintenance Costs

Year One

Year Two

Machine Repair

Year One

Year Two

Ordering Costs

Year One

Year Two

Depreciation

Year One

Year Two

Inventory Carrying

Year One

Year Two

Transportation

Year One

Year Two

Consumable Tooling

Year One

Year Two

OUTSOURCING COSTS:

Purchase Cost

Year One

Year Two

Transportation

Year One

Year Two

New Tooling

Year One

Year Two

Administrative Support

Year One

Year Two

Inventory Carrying Costs

TableYear One Inventory Carrying Charges Outsourcing Option

TableYear Two Inventory Carrying Charges Outsourcing Option

Year One

Year Two

Safety Stock costs

Year One

Year Two

Quality-Related Costs

Year One

Year Two

Ordering Costs

Year One

Year Two

1. RECOMMENDATION
2. OUTSOURCING PLAN
3. INSOURCE/OUTSOURCE DECISIONS
4. INSOURCE/OUTSOURCE ISSUES AND CHALLENGES
5. QUESTION SOLUTIONS

Analysis and Decision

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