Mgmt 6063 – Make or Buy
[pic 1]MAKE OR BUYMGMT-6063 Project Procurement[pic 2][pic 3]Help the childrenHelp the ChildrenTo:Ralph CramdenFrom: Arshdeep  SahdraCC: Mona Brennan-ColesDate:12-2-2018Re:Make or buy decision of toy clownTo 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$5,000Storage$5,00Volunteer Coordination$5,00Volunteer Recognition$1,00Total$6,100
Profit after selling 1,000 toy clowns:Cost for 1  toy clown is$25Cost for 1,000  toy clown is$25,000Therefor total profit is = Total selling cost – Total manufacturing cost= $25,000 – $6,100 = $18,900Profit$18,900The total cost of purchasing toy clown:Cost of one toy clown$9Cost for 1,000 toy clown$9 x 1000 = $9,000Shipping charge for one clown$0.50Shipping charge for 1,000 clown$0.50 x 1,000 = 500Storage$5,00Volunteer Recognition$1,00Total cost10,100Profit after selling 1,000 toy clowns: