1. For an airline, which is in the service sector, describe some of the major elements of its value chain and which may be the most and least amenable to outsourcing. Explain your answer.
2. For a manufracturer of cross country buses, describe the major elements of its value chain and which may be most and least amenable to outsourcing. Explain your answer.
3. For the data below, determine whether outsourcing of the particular manufracturing operation makes financial sense:
(a). The current variable cost per unit $10.00.
(b). The current fixed cost in total $100,000.
(c). The current fixed costs attributed to this product line $60,000.
(d). The quote from an outside vendor to perform the operation $13.00.
(e). The anticipated volume of the widgets needed is 10,000.
Make sure to show your work so you can earn partial credit if your answer is wrong.
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