Mgmt 6063 - Make or Buy
Autor: a_sahdra • February 18, 2018 • Course Note • 476 Words (2 Pages) • 556 Views
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MAKE OR BUY
MGMT-6063 Project Procurement
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Help the children
Help the Children |
To: | Ralph Cramden |
From: | Arshdeep Sahdra |
CC: | Mona Brennan-Coles |
Date: | 12-2-2018 |
Re: | Make or buy decision of toy clown |
To help the children we could raise funds by selling 1,000 toy clowns, however, we have to decide whether we should buy toy clown or manufacture it by ourselves considering the cost and other factors.
Cost comparison:
Total cost for manufacturing of toy clown:
Material cost | $5,000 |
Storage | $5,00 |
Volunteer Coordination | $5,00 |
Volunteer Recognition | $1,00 |
Total | $6,100 |
Profit after selling 1,000 toy clowns:
Cost for 1 toy clown is | $25 |
Cost for 1,000 toy clown is | $25,000 |
Therefor total profit is = Total selling cost – Total manufacturing cost | = $25,000 - $6,100 = $18,900 |
Profit | $18,900 |
The total cost of purchasing toy clown:
Cost of one toy clown | $9 |
Cost for 1,000 toy clown | $9 x 1000 = $9,000 |
Shipping charge for one clown | $0.50 |
Shipping charge for 1,000 clown | $0.50 x 1,000 = 500 |
Storage | $5,00 |
Volunteer Recognition | $1,00 |
Total cost | 10,100 |
Profit after selling 1,000 toy clowns:
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