A Manufacturer of motorcycles buys spark plugs at Rs. 15 each. Now he wish to manufacture the plugs in his own factory. The estimated cost for the manufacture of spark plugs is around Rs. 50,000/- and the variable cost comes to Rs.5/- per spark plug. The production manager advises the manufacturer that the factory should go for manufacturing instead of procuring them from the open market.
List our reasons for the decision of the Production Manager back up by the necessary data?