An online retailer must decide if it should insource or, Operation Management

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An online retailer must decide if it should insource or

Question: An online retailer must decide if it should insource or outsource its Web site maintenance. The company estimates that 4,000 hours per year will be needed to maintain its Web site. To insource maintenance requires $25,000 in fixed costs per year and $27/hour in variable costs. Quotes from suppliers show that Web site maintenance can be outsourced for $35 per hour. Does the cost analysis support insourcing or outsourcing Web site maintenance?

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