Research 2-19 - Your GSIs will help you understand the...

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Paper Topic: The Make Versus Buy Decision One concept underlies all Production decisions: Should the firm make a component or just buy it in pre-made from a supplier? Interestingly, this also applies in our own lives: We wash and iron our blouses and shirts—or we send them out to the cleaners. In this paper, you will identify one activity that you usually do for yourself, calculate the full cost and compare that with “buying it in.” For example, on Saturday mornings, I’m likely to make pancakes for my family for breakfast. If I’m lazy (or busy writing a ugba- 10 exam) I can just take everyone out to Bette’s Oceanview Diner 1 and purchase pancakes at $5.50 per person.
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Unformatted text preview: Your GSIs will help you understand the concept of full cost. You should have an appendix to your paper (beyond the usual two-page limit) showing how you calculate cost of doing something yourself. In the grading, youll be given credit for showing some reasonable creativity in choosing a challenging activity. For example, washing my car myself versus taking it to the car wash is responsive to the prompt, but isnt as complex as some other activities. In your conclusion, discuss whether this exercise was worthwhile in your opinion, and whether, as a result, there are any activities that you are going to pay to have done....
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This note was uploaded on 03/22/2009 for the course UGBA 08403 taught by Professor Robinson during the Spring '09 term at University of California, Berkeley.

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