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More or less outsourcing of IT and manufacturing?

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Some of the experts advocate bringing more activities in house while others recommend additional outsourcing. Which direction do you think NPW should go - more or less outsourcing of IT and manufacturing? Why?

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Solution Summary

The answer to this problem explains how North Pole Works grapples with the problem of outsourcing. The references related to the answer are also included.

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North Pole Works should go in for outsourcing in accordance with the forecasts of the type of toys. In case of toys that are low value and high forecast-ability, North Pole Works should use its own capacity when it is relatively free. When there is a sudden forecast of higher demand, it should outsource these toys so that they can be duplicated. This should be done provided the cost benefits analysis is favorable and the breakeven point is reasonably low. ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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