Problem
Kate has 18 months to build up the capacity her company needs to handle all of the technical support calls. Figure out if it is a better deal for Kate to make or buy. Show costs for each.
1. If they handle the extra work within the company instead of finding a seller, it will cost $35,000 in overtime, $11,000 in training costs and $4,400 per person per month for the five person team needed. What is the total cost to keep the work within the company?
2. To hire another company will cost $20,000 per month and $44,000 in set up costs. What will be the total to outsource this project?
3. Should Kate make or buy?