An online retailer must decide if it should insource or outsource its Web site m
ID: 446337 • Letter: A
Question
An online retailer must decide if it should insource or outsource its Web site maintenance. The company estimates that 3,600 hours per year will be needed to maintain its Web site. To insource maintenance requires $34,000 in fixed costs per year and $24/hour in variable costs. Quotes from suppliers show that Web site maintenance can be outsourced for $33 per hour.
An online retailer must decide if it should insource or outsource its Web site maintenance. The company estimates that 3,600 hours per year will be needed to maintain its Web site. To insource maintenance requires $34,000 in fixed costs per year and $24/hour in variable costs. Quotes from suppliers show that Web site maintenance can be outsourced for $33 per hour.
Explanation / Answer
1. Total cost insource $93,000 per year
Total cost outsource $1,00,000 per year
2.Outsource option is good option.