$10.00 Airlines Outsourcing Elements of its Value Chain
Deliverable Length: 1,000–1,250 words
Details: A common issue that both service and manufacturing sector firms encounter is the opportunity to outsource one or more of their operations.
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 manufacturer of cross-country buses, describe the major elements of its value chain and which may be the most and least amenable to outsourcing. Explain your answer.
3.For the data below, determine whether outsourcing of the particular manufacturing operation makes financial sense:
◦The current variable cost per unit $10.00.
◦The current fixed costs in total $100,000.
◦The current fixed costs attributed to this product line $60,000.
◦The quote from an outside vendor to perform the operation $13.00.
◦The anticipated volume of widgets needed is 10,000.
Make sure to show your work so you can earn partial credit if your answer is wrong.