The Consumer Products division of Standard Appliances has been struggling lately. Management has noticed a steady level of losses being reported, and is concerned about how to turn the division around. The division manager reports that the production of Toasters is causing the issue. As part of an in-depth analysis, management wants you to evaluate the following possible solution.
One of the essential parts of the toasters (the heating coil) has been produced in-house for a long time. However, management is aware that there are companies that would be able to supply the heating coils-and potentially generate significant savings for the company.
Using the above information relating to the options of whether to purchase or produce the heating coils, would it be cheaper to purchase the coils or continue producing them in-house?

Question

The Consumer Products division of Standard Appliances has been struggling lately. Management has noticed a steady level of losses being reported, and is concerned about how to turn the division around. The division manager reports that the production of Toasters is causing the issue. As part of an in-depth analysis, management wants you to evaluate the following possible solution.
One of the essential parts of the toasters (the heating coil) has been produced in-house for a long time. However, management is aware that there are companies that would be able to supply the heating coils-and potentially generate significant savings for the company.
  Using the above information relating to the options of whether to purchase or produce the heating coils, would it be cheaper to purchase the coils or continue producing them in-house?

Quizplus · Accepted Answer

The Answer of The Consumer Products division of Standard Appliances has been struggling lately. Management has noticed a steady level of losses being reported, and is concerned about how to turn the division around. The division manager reports that the production of Toasters is causing the issue. As part of an in-depth analysis, management wants you to evaluate the following possible solution.
One of the essential parts of the toasters (the heating coil) has been produced in-house for a long time. However, management is aware that there are companies that would be able to supply the heating coils-and potentially generate significant savings for the company.
  Using the above information relating to the options of whether to purchase or produce the heating coils, would it be cheaper to purchase the coils or continue producing them in-house?

The Consumer Products Division of Standard Appliances Has Been Struggling