Liquid Chemicals Case Analysis
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Title: Liquid Chemicals Case Analysis

Essay Details:

Subject: Business
Author: Ronald B
Date: August 25, 2014
Level: University
Grade: A
Length: 2 / 490

Essay text:

LCC uses high quality containers for packaging of its products. A separate department is designated for this purpose, which deals with manufacturing and maintenance of containers. Mr. Walsh, the general manager of LCC, wishes to outsource both manufacturing and maintenance of containers to Packages Ltd. he wants to have a close look at the tradeoff associated with all the option available to him. Mr. Walsh is pondering over following options: Option A: Status quo Option B: manufacturing outsourced, maintenance in-house Option C: both manufacturing and maintenance outsourced Option D: manufacturing in-house, maintenance outsourced Assumption: GHL not to be stored for more than four years OPTION A COMPARED TO OPTION C Manufacturing Maintenance Option A ? ? Option C ? ? ? : In-house ? : Outsourced Incremental annual cost of Option A compared to Option C (Pounds Sterling) Period< 4 years Period > 4 Years Materials 6600 7400 Labor 4700 4700 Manager’s salary 800 800 Rent of warehouse 850 850 Depreciation (opportunity cost) of Machine 500 1500 Maintenance of machine 360 360 Other expenses 1575 1575 Total 15385 17185 Payment to Packages Ltd...

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