Analyze case - What decisions should be made base on the proposal to outsource. What recommendations should be made based on the following:
ITC and Xioping had been aggressively trying to land the deal with Harwood. The proposed annual contract price had been reduced twice, and currently stood at a fixed $850 thousand per year. There would also be a one-time $80,000 agency fee due to ITC upon the deal closing. The contract period would be four years, renewed annually thereafter. If the required production levels were to increase then the contract price would be changed accordingly. If demand were to fall, however, Sonvilier was required to accept the minimum quantity defined by the original contract terms. Storage of inventory for items so small was of little concern to Harwood though. And Harwood fully expected component demand to be steady over the contract period.?
Attachment:- Assignment.rar