Business, 19.03.2021 18:30 thechameleonnaire

David is trying to decide if it makes sense to outsource the purchasing function. He has a chain of 12 restaurants and employs two buyers at an annual fixed cost of $85,000. David estimates that the variable cost of each purchase order placed is $15. An outsourced company will perform the purchasing function for a fixed annual fee of $100,000 plus $5 for each purchase order placed. Last year, David placed 1400 purchase orders. Required:
a. What was the in-house purchasing cost last year?
b. What would the cost be if outsourced?
c. If David estimates it will place 1600 purchase orders next year, should he outsourced?

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David is trying to decide if it makes sense to outsource the purchasing function. He has a chain of...