The Outsourcing Opportunity
A day later, Jim Edwards, the owner of Easy Printing, a local one-room printing operation in Seattle stopped by to talk to Smith. Edwards wanted to know if Smith's printing firm TPE could use some help printing color brochures over the next few months. Edwards's largest customer had just informed him that it was going out of business and would no longer need his printing services Most of Easy Printing's customers were small companies needing basic printing services for small jobs. But several of his customers, including his largest customer, used his services for both basic printing services and more elaborate work, including color brochures. Edwards had a long-standing relationship with the customer's owner, and had purchased the small printing press he used for color brochures partially to serve his customer's needs. He was unsure how he was going to get enough business to make up for this loss, especially as he was primarily known for his basic printing services rather than printing elaborate brochures.
Edwards decided to stop by and talk with Smith. "I've had some bad luck. My largest customer just informed me that it is closing its doors. I've been doing their color printing work for several years, and their closing leaves me with a lot of idle capacity. I wonder if you have any extra brochure printing I can help with. I'd be happy to do it really cheaply just to keep my press going. I would go as low as $8 per 100 brochures. And I could handle 30,000 brochures for you next month."
Ignoring the special order in question 6, should TPE outsource 30,000 brochures to Easy Printing? Again, provide both financial and non-financial considerations.